Double Fine Has Laid Off 23 Employees After Going Independent

Double Fine Productions has laid off 23 employees following its independence from Xbox. The Psychonauts developer described the decision as a “painful action,” marking a bleak start to its next chapter outside Xbox.

Double Fine Cuts Around 25% Of Its Workforce

In an official statement posted on Bluesky, Double Fine confirmed the job cuts and thanked the affected employees for their contributions to the studio.

Today, Double Fine Productions let go of 23 members of our staff”

The developer added that the layoffs were not taken lightly. However, it determined that reducing its workforce was necessary for the studio’s continued survival as an independent company.

As a small, tightly-knit team, these actions are not taken lightly. Only the survival of our studio would ever make us consider such a painful action.”

Double Fine Remains Committed To Support The Affected People

In the same statement, they assured their commitment to help the laid-off employees

We are committed to supporting each affected person as best as we can, and we thank them for their hard work and commitment to the creative spirit we cherish here at Double Fine.”

Double Fine was acquired by Microsoft in 2019 and subsequently released Psychonauts 2, Keeper, and Klin.

Double Fine Were Among The Studios Affected By Recent “Restructuring” At Xbox

In July 2026, Double Fine was among the five studios affected by significant cuts alongside Compulsion Games, Ninja Theory, Undead Labs, and Arkane Lyon 

Double Fine and Compulsion Games went independent, while Ninja Theory and Undead Labs were sold to new ownership. Arkane Lyon’s future is currently uncertain. 

It’s also confirmed that Double Fine retains the rights to all its IPs

For now, Double Fine has not detailed how the reduced workforce will affect its current projects or long-term release plans. The priority, however, remains the 23 developers now looking for new roles during another difficult period for game workers.