Double Fine, the beloved studio responsible for games like Psychonauts, Brutal Legend, and Costume Quest, laid off 23 people today. The news comes as the studio goes independent after years of Xbox ownership.
"Today, Double Fine Productions let go of 23 members of its staff," the company says in a social media post attributed to founder Tim Schafer. "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. Our transition to becoming an independent company means becoming a size that we can sustain."
According to Bloomberg's Jason Schreier, Double Fine employed "around 90 people" before today's layoffs, so roughly a quarter of the studio is now gone. Among those affected is Ben Johnson, a game designer on Kiln who posted about the layoffs on Bluesky just ahead of the news being publicly reported.
Layoffs hit Double Fine today, and I'm sorry to report that I was one of the ones hit. If you need a game designer with tech chops and 2+ decades of experience, here I am.
— @gamedesignerben.bsky.social (@gamedesignerben.bsky.social.bsky.social) 2026-07-28T19:26:08.426Z
"The people we are losing were all important," Schafer's message concludes. "They all made an impact on our games and culture, and they will be missed. 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."
Schafer founded Double Fine after departing LucasArts in 2000. The studio's always been known for creative games that develop cult followings, but even darlings like Psychonauts and Brutal Legend never became breakout hits. Microsoft acquired Double Fine in 2019 as part of Xbox's massive studio-buying spree. Under Xbox, Double Fine published Psychonauts 2, Keeper, and Kiln.
In a statement to GamesRadar+, an Xbox spokesperson clarifies: "Double Fine fully returned to independent management earlier this week, with their IP, catalog, and runway for their next games. As they begin their next chapter as an independent studio, we look forward to seeing what they create next."
Amid Xbox's big restructuring, which will cause 3,200 employees to lose their jobs, Double Fine was named as one of the four studios set to go independent. But it seems the path of independence isn't without consequences, either.
