Undead Labs, the developer behind the State of Decay series, has confirmed that it has parted ways with a "significant" number of staff following its separation from Xbox. The studio announced the layoffs on LinkedIn, describing the situation as a difficult moment after years of work from the affected employees.
In a statement provided to IGN, Undead Labs Studio Head Philip Holt assured that these changes will not impact the development or launch of State of Decay 3. "The team is continuing its work on schedule, and we remain committed to delivering the experience our community has been waiting for," Holt said. He also expressed gratitude for the contributions of those who are no longer with the studio.
The layoffs occurred shortly after Undead Labs' independence from Xbox, which is part of a broader strategic shift by Microsoft for its gaming division. While many Xbox-owned studios facing potential closure have managed to become independent, the situation for Undead Labs sees a portion of its workforce departing.
Undead Labs stated that the work of the departing developers remains an integral part of both the studio and State of Decay 3. The studio is embracing its new independent status, with Holt emphasizing a closer connection to the community and a renewed focus on game development.
"Independence brings us closer to our community and lets us focus on what matters most: making the best games we can and earning the continued support of the people who choose to spend their time with us," Holt added. State of Decay 3 is currently slated for a 2027 release.