Undead Labs’ CEO, Philip Holt, has chosen not to disclose the number of employees the studio lost when it separated from Xbox.
In a recent interview with The Game Business, Holt shared, “It was incredibly difficult to have to say goodbye. I prefer not to reduce the impact on those individuals to mere numbers or statistics.”
Holt admitted to being “unusually transparent” with the staff during Undead Labs’ transition to an “employee-owned studio.”
“Instead of keeping them in the dark or creating a false reality, I chose to involve them in the process. This approach helped alleviate some of the anxiety,” he explained. “I empathized with their situation. Feeling out of control, unsure about the future of their job, and questioning if the game would even be completed.”
“I tried to provide as much information as possible. We had open and honest conversations. We addressed early on that job losses were inevitable under any scenario. When the layoffs occurred, people were somewhat prepared. While it was painful, it turned out to be a sign of respect. Losing a job is never easy, but I believe the reasons were understood.”
Holt emphasized, “As a result, the remaining team does not view the company, or me, as someone who caused harm to their colleagues. They recognized it as a necessary outcome given the circumstances.”
To gain independence from Xbox, Holt established a new corporate entity named Full Measure, granting all employees ownership shares.
“This was not the typical founding of a company. I was not the first employee, did not secure startup funding, and did not shoulder all the financial risk. The company’s value is a result of the current team and those who have departed. Thus, it was crucial to me that everyone had a stake and a chance for future benefits, as their contributions are integral to the company’s success,” he stated.
Holt revealed that Undead Labs attracted significant interest before becoming independent, leading him to pursue a management buyout similar to other studios.
“I believed that because we were close to generating revenue, the capital required to complete [State of Decay 3] was within reach for us to secure independently,” he noted. “This led me to propose a management-led acquisition, which Microsoft agreed to.”
Undead Labs was one of the five studios divested during the initial Xbox layoffs, affecting 3,200 employees as part of a broader restructuring.
While Compulsion Games and Double Fine have confirmed their independence, Arkane Lyon is still in discussions, and Ninja Theory is facing closure after unsuccessful negotiations, resulting in staff layoffs.