# Undead Labs becomes worker-owned amid redundancies after Xbox split

- URL: https://talkfuse.com/story/state-of-decay-studio-undead-labs-goes-independent-after-xbox-restructuring-but-lays-off-a-significant-number-of-the-team-in-doing-so/
- Published: 2026-09-23T10:19:14+00:00
- Updated: 2026-09-23T16:41:23+00:00
- Original publisher: Eurogamer
- Original article: https://www.eurogamer.net/undead-labs-independent-xbox-restructuring-state-of-decay
- Topics: Entertainment, Gaming

## Key points

- Undead Labs separated from Xbox and became independent, worker-owned studio
- Studio announced significant job losses alongside the independence transition
- State of Decay 3 development continues, staying on Game Pass across multiple platforms

## Summary

Undead Labs, developer of State of Decay, has become an independent, worker-owned studio following its separation from Microsoft's Xbox division during the company's latest restructuring. The separation comes with significant downsides, however, as the studio announced redundancies affecting "a significant number" of employees whilst asserting that independence would allow it to focus more closely on its community and games.

State of Decay 3 remains in active development across Xbox, PC and PlayStation, with a closed beta targeted before the end of 2026 and a 2027 release date planned. The game will continue to be available on Game Pass under a new, yet unnamed publisher, ending a 15-year partnership with Xbox that began when Microsoft first published the original State of Decay in 2013 and acquired the studio in 2018.

## Coverage

- [Eurogamer: Undead Labs becomes worker-owned amid redundancies after Xbox split](https://www.eurogamer.net/undead-labs-independent-xbox-restructuring-state-of-decay)
- [Rock Paper Shotgun: State of Decay 3 studio Undead Labs lay off "a significant number" of "exceptionally talented developers" after gaining independence from Xbox](https://www.rockpapershotgun.com/state-of-decay-3-studio-undead-labs-lay-off-a-significant-number-of-exceptionally-talented-developers-after-gaining-independence-from-xbox)

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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.