Double Fine, the studio behind Psychonauts and Brütal Legend, has laid off around a third of its staff just weeks after regaining independence from Xbox. Founder Tim Schafer confirmed the redundancies, framing them as a necessary step to secure the studio's future now that it no longer has the financial backing of a major publisher. The move highlights the sharp challenges facing even well-established, critically acclaimed studios once they step outside the shelter of corporate ownership.

The cuts come roughly three weeks after Microsoft ended its ownership of Double Fine, returning the studio to independent status. Schafer has portrayed the layoffs as essential for long-term viability rather than a sign of imminent collapse, but the scale and timing underline how quickly financial pressures can mount for developers adjusting to life without a parent company's resources.