Double Fine Lays Off 25 Percent of Staff After Xbox Split

Double Fine laid off approximately 25.6% of its staff on July 28, 2026, as the game development studio transitioned back to an independent company. The downsizing follows a corporate overhaul by Microsoft Xbox, which unloaded Double Fine and Compulsion Games. The studio, which consists of roughly 90 people, stated the cuts were necessary to achieve a sustainable size.

Microsoft Xbox confirmed that Double Fine retains its intellectual property, catalog, and runway for future games. This separation is part of a larger restructuring effort at Microsoft Xbox led by CEO Asha Sharma. On July 6, 2026, Sharma announced changes impacting 3,200 employees, which included 1,600 layoffs. The strategic shift aims to return the gaming division to growth by 2027.