Undead Labs Leader Credits Honesty with Staff During Microsoft Transition
The head of Undead Labs explained that he deliberately kept employees informed throughout Xbox's games division restructuring to help them mentally prepare for potential job losses. The studio has now become independent with current employees as shareholders, though a significant number of staff departed during the transition. The studio head argued that transparency, while unconventional, ultimately reduced anxiety and helped the remaining team understand the necessity of the changes.
Microsoft's restructuring of its gaming division prompted Undead Labs to seek independence rather than face potential closure. The studio successfully purchased itself through a newly formed entity, transforming its workforce into shareholders. This transition involved significant personnel departures, though Holt declined to quantify the losses out of respect for affected employees.
The studio's independence restructuring required modifications to State of Decay 3's development scope, yet the project remains targeted for a 2027 launch. Undead Labs has adopted employee ownership as a core operational principle, viewing transparency and profit-sharing as methods to build organizational trust and demonstrate the company's worthiness of staff commitment.
This case may influence how other studios approach employee communication during corporate transitions and industry consolidation. Holt's strategy could set precedent for alternative leadership models that prioritize worker agency through ownership and honest dialogue, potentially affecting studio retention and morale during future restructuring. The approach could also shape discussions around employment stability in gaming, an industry historically characterized by layoffs and project cancellations.