Undead Labs studio boss Philip Holt is “reluctant to share” how many employees the developer lost when it became independent of Xbox.
“It was a total heartbreak to have to part ways,” he recently told The Game Business. “I would hate to reduce the impact to those individuals to a number or statistic.”
Holt acknowledged he was “irresponsibly transparent” with staff during Undead Labs’ transition to an “employee-owned studio.”
“Rather than keeping them in the dark and manufacture some alternate reality, I just brought them alongside. That probably reduced some anxiety,” he explained. “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.”
“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.”
Holt added: “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.”
To achieve independence from Xbox, Holt established a corporate entity called Full Measure, making all employees shareholders.
“This is not a typical founding of a company. I wasn’t employee one. I didn’t raise the startup capital, and I didn’t take on all the commercial risk. The value that’s present has been created by the team that’s here, and the team that just left. So, it was really important to me that everybody has a stake and an opportunity for upside participation, because so much of the company’s worth is the work that they have contributed to.”
Holt said that Undead Labs had “a lot of interest” before becoming independent, and that he pursued a management buyout similar to other studios.
“I also thought that because we were so close to being in revenue, the amount of capital that we needed to finish [State of Decay 3] was not an insurmountable amount that we couldn’t go raise it ourselves,” he said. “So I submitted an offer for a management-led acquisition, and Microsoft thought that would be a good idea.”
Undead Labs was among five studios divested during the initial round of Xbox layoffs, which impacted 3,200 employees as part of a broader restructuring.
Compulsion Games and Double Fine have confirmed their independence. Arkane Lyon remains in consultation, while Ninja Theory faces closure after two failed agreements and has begun staff layoffs.