Veteran game developer Double Fine has undergone significant staff reductions following its separation from Microsoft. Studio head Tim Schafer confirmed that 23 employees, approximately 25% of the studio's total workforce, were laid off this week. Schafer stated that these decisions were made with the utmost seriousness and are intended to ensure the studio's long-term survival as an independent entity.
"As a small, tightly knit team, these actions are not taken lightly," Schafer said in a statement. "Only the survival of our studio would ever make us consider such a painful move." He further explained that the studio needed to scale down to a size that it can sustain independently. Double Fine is committed to supporting the affected staff "as best we can" and expressed gratitude for their contributions.
Founded in 2000, Double Fine operated independently until its acquisition by Microsoft in 2019. At the time of the acquisition, Schafer had voiced concerns about maintaining the studio's "culture and identity" under Microsoft's ownership but proceeded with the deal under the assumption that the studio would retain operational independence.
Earlier this month, Microsoft announced a broad restructuring of its Xbox division, which included divesting several studios. As part of Double Fine's separation, Microsoft confirmed that the studio would retain its intellectual property, existing game catalog, and resources for future projects. During its tenure under Microsoft, Double Fine released Psychonauts 2 in 2021, with future titles including Keeper and Kiln slated for 2025 and 2026, respectively.