Undead Labs confirms significant layoffs after independence from Xbox; says State of Decay 3 unaffected
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Undead Labs confirmed it underwent "significant" layoffs after becoming independent from Xbox and said State of Decay 3 remains in active development and its launch will not be impacted, IGN reported. The studio announced on LinkedIn that it was parting ways with a "significant" number of staff, according to IGN. IGN updated the story on Sep 22, 2026 with a statement from Undead Labs studio head Philip Holt reiterating that the game's release will not suffer setbacks. IGN also reported the studio's separation from Xbox follows Microsoft's brand reset earlier this summer.
- What happened: IGN reported that Undead Labs announced on LinkedIn it is parting ways with a "significant" number of staff following its independence from Xbox.
- Why it matters: IGN published an update on Sep 22, 2026 including a statement from Undead Labs studio head Philip Holt saying State of Decay 3 "remains in active development" and that the layoffs "will not impact the game's launch."
- Context: IGN reported the layoffs come after Undead Labs' separation from Xbox, which followed Microsoft's brand reset earlier this summer.
- What next: IGN did not provide specific figures, affected roles, or details about which projects beyond State of Decay 3 were impacted; those specifics are not confirmed in the cited reporting.
What changed
IGN reports that Undead Labs has confirmed "significant" layoffs and announced via LinkedIn that it is parting ways with a "significant" number of staff. The studio is now independent from Xbox following a change tied to Microsoft's brand reset earlier this summer, per IGN.
Timeline
- Earlier this summer: IGN reported Undead Labs' separation from Xbox as part of Microsoft's broader brand reset.
- Sep 22, 2026: IGN updated its story with a statement from Undead Labs studio head Philip Holt addressing the layoffs and State of Decay 3's development.
Before and after
- Before: Undead Labs had been associated with Xbox.
- After: The studio is operating independently and has announced workforce reductions while stating the State of Decay 3 team continues work on schedule, according to IGN.
Limits
IGN's reporting includes no specific numbers for the layoffs, no breakdown of affected roles or teams, and no additional details about changes to other projects. Those details remain unconfirmed in the cited coverage.