Undead Labs Exits Xbox: Staff Layoff Numbers Hidden [Confirmed]

Undead Labs studio head Philip Holt officially confirmed that the State of Decay developer suffered staff layoffs during its transition into an independent, employee-owned studio separate from Microsoft Xbox, though he remains reluctant to publicly disclose exact employee reduction figures. According to verified reports from GamesIndustry.biz, Holt explained his decision to withhold casualty statistics during an interview with The Game Business, stating he refused to reduce departing colleagues to mere numbers. Holt revealed he maintained radical transparency with team members throughout the divestment, warning staff early that job losses were inevitable under almost any spinout scenario. To execute the separation from Xbox, leadership formed a specialized corporate vehicle to establish independent operations while attempting to safeguard active development on State of Decay 3. The move highlights broader volatility sweeping major publishing networks, contrasting sharply against massive corporate consolidation seen across the sector like the [Gaming Industry M&A Q3 2026: EA $55B Buyout [Confirmed]](/news/gaming-industry-ma-q3-ea-buyout). Despite the reduction, Holt maintained that surviving developers hold no animosity toward studio leadership, viewing the painful staff cuts as an unavoidable operational necessity to preserve creative autonomy and complete their flagship survival title.