Undead Labs, the studio behind the “State of Decay” series, has confirmed layoffs took place as it transitioned away from Microsoft’s Xbox Game Studios umbrella, but its leadership has declined to specify how many employees were let go. Studio head Philip Holt said he was “reluctant to share” a precise figure, arguing that attaching a number to the job losses risked minimising their real-world impact on the people affected. The remarks, first reported by Undead Labs boss “reluctant to share” number affected by layoffs: “I would hate to reduce the impact to those individuals to a number or statistic”, mark one of the more candid — if numerically vague — public responses from a studio leader navigating a corporate restructuring.
Holt’s comments frame the layoffs as a deeply personal matter for those involved rather than a line item to be reported alongside other industry statistics. He suggested that reducing the departures to a single figure would fail to capture the disruption experienced by individual staff members, many of whom had built careers around the studio’s long-running zombie survival franchise. The studio has not detailed how many employees remain on its roster following the restructuring, nor has it outlined which projects are currently in active development as a result of the leaner headcount.
Independence From Xbox Brings Uncertainty
The layoffs stem from Undead Labs’ separation from Xbox Game Studios, a move that effectively ends the direct ownership relationship the studio held with Microsoft’s gaming division. Such transitions typically require studios to restructure their operations, renegotiate funding and publishing arrangements, and in many cases scale down teams that had been built to Xbox-first production standards. While the exact commercial terms of the split have not been disclosed, the timing places Undead Labs among a growing list of studios adjusting to leaner structures after years of expansion under major platform holders.
The episode adds to a broader pattern of consolidation and workforce reduction across the gaming industry, where studios tied to large publishers have faced repeated rounds of layoffs amid shifting investment priorities and cost-cutting at the corporate level. For industry observers in the Gulf region, where gaming has emerged as a fast-growing sector for investment and talent development, the Undead Labs case underscores the volatility that can accompany even established studios with recognisable franchises. The UAE and wider GCC have positioned themselves as destinations for gaming investment, hosting regional offices, esports events and partnerships with international publishers, making the stability of global studio ecosystems a point of interest for regional investors and industry professionals tracking where development talent and projects may ultimately land.
No further details have emerged regarding severance arrangements, internal communications to affected staff, or whether additional restructuring at Undead Labs is anticipated. The studio’s reluctance to publish a specific figure leaves the scale of the layoffs, and their broader implications for its remaining workforce and upcoming projects, unresolved for now.
