State of Decay studio boss says he was ‘irresponsibly transparent’ to staff to make layoffs easier to take

The studio head at Undead Labs says he was “irresponsibly” transparent to staff during Xbox’s ‘reset’ process, to prepare them for the potential of layoffs.

In June, Xbox CEO Asha Sharma revealed that Microsoft was in the process of ‘resetting’ its games business, which has since resulted in significant job losses and the closure, release or restructuring of multiple studios.

It was then reported that State of Decay 3 developer Undead Labs was one of the studios facing closure, unless a buyer could be found.

Last month, while announcing the second phase of its ‘reset’ including further layoffs and widespread changes to its studio structure, Xbox confirmed that Undead Labs had not been closed, and had gone fully independent.

Now, in an interview with The Game Business, studio head Philip Holt has explained that the studio has bought out itself, with current employees as shareholders, but that this process has resulted in “a significant number of people leaving the company”.

Holt said he was “reluctant to share that number because these are our friends and colleagues” and he “would hate to reduce the impact to those individuals to a number or statistic”.

He did explain, however, that the staff were prepared for the worst because he was “irresponsibly transparent” with them and kept them informed of how the whole process was going, even when that news wasn’t sounding positive.

“Rather than keeping them in the dark and manufacture some alternate reality, I just brought them alongside,” he said. “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.

“As a result, the surviving team doesn’t look at the company, or at me, as someone who’s done great damage to the people they love. They saw it as a necessary consequence of the reality that we’re in.”

The studio is now in the process of issuing stock options to all its staff, after acquiring itself from Microsoft through a company it called Full Measure.

Explaining that the name refers to the Gettysburg Address, Holt said that “Lincoln talked about ‘the last full measure of devotion'”, adding: “There’s this commitment that we have to engender in our studio. I can’t say ‘require’, because commitment is something we freely choose to do. So I selected that name because any company’s obligation is to be worthy of a team’s commitment.

“That’s the philosophical idea. How does that translate into the things we do? Employee ownership is part of that. Being transparent, and sharing the good news, and especially the bad news. Those are part of how a company can be worthy of that commitment.”

Holt says the studio has had to “make some changes” to State of Decay 3 following its “significant” layoffs, but that the project hasn’t been radically rescoped and is still set for release in 2027.