Update [Tue 22nd Sep 2026, 11:45pm]: State of Decay developer Undead Labs is now an independent company, but on the same day another wave of Xbox layoffs was confirmed, the team has shared it's undergone "significant" job losses itself.
In a LinkedIn post, the studio said: "Unfortunately, today we are also saying goodbye to a significant number of our colleagues. It's difficult to reach this moment knowing that not everyone who helped get us here gets to make the rest of the journey with us."
Original Story: Undead Labs, the Seattle-based developer behind the State of Decay games, has survived the latest round of Xbox layoffs.
However, the studio has reiterated that it'll no longer operate under the Xbox umbrella; it's now an independent outfit. This direction of travel was previously confirmed a few months back, when the developer said that it was "transitioning out of Xbox".
Unlike Ninja Theory, which is shutting down after being unable to find a buyer, Undead Labs seems to possess the financial stability to stay afloat.
"Independence brings us closer to our community and lets us focus on what matters most: making the best games we can and earning the continued support of the people who choose to spend their time with us," reads a statement from studio head Philip Holt.
Undead Labs became part of Microsoft's gaming division in 2018, but it had been partnering with the company since 2011.
Holt goes on to acknowledge that lengthy relationship: "Microsoft has been part of the State of Decay story from the very beginning, and we’re proud of everything we’ve accomplished together."
سەرچاوەی فەرمی بە زمانی ئینگلیزی: https://www.pushsquare.com/news/2026/09/state-of-decay-3-dev-hit-with-significant-layoffs-after-going-independent
