It's been three weeks since Xbox's massive "reset" that saw over 3,200 employees lose their jobs, and the damage reports of its aftermath continue to pour in. The latest casualty report of this "reset" comes from Double Fine Productions, one of the studios that actually managed to escape the worst of it by going independent.
However, Double Fine Productions didn't survive unscathed. On July 28, 2026, its studio head, Tim Schafer, announced on Bluesky that to survive Xbox's "reset," Double Fine Productions had no choice but to lay off 23 employees.
BREAKING | Double Fine is laying off 23 people today, three weeks after Xbox divested the studio as part of its massive restructuring.The studio was around 90 people before the layoffs. pic.twitter.com/m5HKzjFn5kJuly 28, 2026
Tim Schafer says in his announcement, “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 also means becoming a size that we can sustain."
However, that doesn't mean Double Fine Productions will simply kick its employees out the door, as Tim Schafer says his company is committed to supporting everyone affected by the decision as thanks for all their hard work and commitment they've brought to Double Fine and the gaming industry.
Windows Central's take
Losing Double Fine Productions is a sad setback for the Xbox brand, as Double Fine Productions has created some of the wild and unique games artistically I've seen on the platform, including the Psychonauts series, Brütal Legend, The Keeper, and Kiln, to name a few
While I'm angry and tired of seeing more people lose their jobs because of Microsoft ( even Bethesda, Id Software, or Zenimax couldn't escape layoffs), I'm happy to see Double Fine Productions has managed to regain its freedom so it can continue to make wild and creative games without corporate meddling getting in its way.
Plus, I think Double Fine Productions may have dodged a bullet in the long run because Microsoft has seemingly been fumbling more and more as of late.
Notable examples include its Xbox Live service suffering major outages that stopped people accessing digital games more than usual (the latest lasting for nearly a day), blocking people's entire Microsoft accounts through no fault of their own, and making self-harmful pushes towards AI.
If Microsoft hopes to keep its fans on its side for its Project Helix console, it needs to seriously improve the stability of its digital services and not casually treat its game developers like disposable assets; otherwise, the Xbox brand might not last much longer.
But what do you think? Do you think Double Fine Productions becoming independent of Microsoft was the smart decision despite having to lay off its staff to do it? Will Microsoft be able to redeem itself in the eyes of its customers after this latest string of controversial decisions and technical oversights?
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