Double Fine Lays Off 23 Employees Weeks After Xbox Split

Double Fine Productions has laid off 23 employees just weeks after regaining its independence following split from Xbox. The latest job cuts come after Xbox’s sweeping gaming restructuring earlier this month, which resulted in thousands of layoffs and several Xbox-owned studios, including Double Fine, returning to independent identity.

Double Fine is yet another studio impacted by layoffs following Xbox split

In a statement shared on Bluesky, Double Fine’s founder and studio head Tim Schafer noted that the layoffs was announced only for “the survival of our studio.” The post also thanked departing employees for their contributions and said Double Fine would support those affected during the transition.

Double Fine is the latest name to join a growing list of developers reducing headcount in 2026. One of those names is IO Interactive, which also reduced staff as developers continue adjusting to rising development costs, shifting priorities, and a slower investment environment.

A harsh reality for independent studios

Double Fine’s lay off announcement is a clear example of independence coming at a financial cost, despite providing greater creative freedom. For smaller teams, keeping projects alive sometimes means making painful staffing decisions. Despite the layoffs, Double Fine said it remains committed to its future and thanked every affected employee for helping shape the studio’s games and culture. All that said, the studio hasn’t announced changes to its current projects.