# Xbox spin-off Double Fine cuts 23 jobs weeks after divestment

- URL: https://talkfuse.com/story/double-fine-lays-off-23-after-leaving-xbox-game-studios/
- Published: 2026-07-29T07:32:26+00:00
- Updated: 2026-07-29T13:47:57+00:00
- Original publisher: Polygon
- Original article: https://www.polygon.com/double-fine-layoffs-xbox/
- Topics: Entertainment, Gaming, Software, Technology

## Key points

- Double Fine cuts 23 jobs weeks after Xbox divestment
- Founder Tim Schafer cites need for studio's survival
- First of four spun-off Xbox studios to announce layoffs

## Summary

Double Fine, the studio behind Psychonauts 2, Keeper and Kiln, has laid off 23 developers, just weeks after Microsoft's Xbox division divested the company as part of a wider restructuring. Founder Tim Schafer said the cuts were necessary for the studio's survival as it adjusts to becoming a self-sustaining independent company again, calling the decision painful for a small, close-knit team. Double Fine is the first of four studios recently spun off by Xbox to announce layoffs publicly, underlining the tough conditions facing mid-size developers across the games industry.

Double Fine, founded in 2000 by former LucasArts staff, built its reputation with quirky titles including Psychonauts, Brutal Legend and Broken Age before Xbox acquired it in 2019 during the troubled development of Psychonauts 2, which went on to earn a Game of the Year nomination. According to Bloomberg's Jason Schreier, who first reported the layoffs, the studio employed around 90 people at the time of the cuts. The divestment, announced by Xbox CEO Asha Sharma alongside similar moves for Compulsion Games, Ninja Theory and Undead Labs, came shortly after Double Fine's staff unionised and released the pottery-themed multiplayer game Kiln, which failed to gain much traction. Double Fine says it remains committed to supporting the affected staff as it transitions to independence.

## Coverage

- [Polygon: Xbox spin-off Double Fine cuts 23 jobs weeks after divestment](https://www.polygon.com/double-fine-layoffs-xbox/)
- [Push Square: Newly Independent Double Fine Has to Lay Off 23 Devs to Ensure Survival of the Studio](https://www.pushsquare.com/news/2026/07/newly-independent-double-fine-has-to-lay-off-23-devs-to-ensure-survival-of-the-studio)

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Summarised by TalkFuse (https://talkfuse.com/). Quote the original publisher for the reporting and link this page for the summary and discussion.