Undead Labs studio head says they were 'irresponsibly transparent' in preparing staff for layoffs

Undead Labs, the studio behind the State of Decay titles and the in-development S tate of Decay 3 , has had a rocky few months since Xbox announced plans to divest the studio from its Xbox Game Studios portfolio back in July. In the intervening months, the studio has faced the specter of layoffs as it transitions from an Xbox studio to an independent one, and studio leadership has weathered this turbulence by being candid with the team.

In an interview with The Game Business , Undead Labs studio head Philip Holt explained that he has tried to be open and clear with the studio that layoffs were likely coming as part of the Xbox divestiture and pivot to independent ownership— which they did in late September .

“Rather than keeping them in the dark and manufacture some alternate reality, I just brought them alongside," Holt told The Game Business. "That probably reduced some anxiety. I tried to put myself in their shoes. You’re not in control, you don’t really know what’s happening, you know your job might be at risk, and you’re wondering if this game is actually going to finish. So, I tried to share as much as I could. We had pretty direct conversations. We talked early on that under probably any scenario, there’d be job losses. On the day of the layoff, people were prepared. That ended up being a real courtesy, as painful as it was. Nobody wants to lose a job, but I think people understood the reason."

Providing advanced notice for mass layoffs is the backbone of the Worker Adjustment and Retraining Notification (WARN) act in California, requiring a 60-day notice period for companies with over 75 employees barring penalties for employers that violate it. Though Undead Labs is located in Washington, the same value principles on layoffs seem to apply here. The reasoning at the time of passing was that it provides a chance for employees to search for other employment before being left out in the cold.

Holt would not confirm the specific number of job losses, arguing that turns the layoffs into a statistic and takes the view away from the people who were let go, but the studio confirmed on LinkedIn that the layoffs were "significant." After separating from Microsoft, Undead Labs took itself independent, and retained the State of Decay property.

Undead Labs is currently working on State of Decay 3 , a zombie survival game announced under the Xbox banner in 2020, two years after Microsoft acquired the studio. Despite the layoffs, Holt insists that the game is still on target for a 2027 release.

Update 10/7: This story has been updated with the correct spelling of Undead Labs' studio name.