Schell Games Ends 24-Year No-Layoff Streak With 10% Staff Cut Amid Industry Shift

For 24 years, through the dot-com bust, the 2008 financial crisis, and the volatile birth of the consumer virtual reality market, Schell Games held a singular, defining streak: zero layoffs. That run ended this week. The Pittsburgh-based independent studio, best known for developing 'Among Us VR' and the 'I Expect You To Die' franchise, has cut 10% of its workforce.[1][2]

The reduction shatters a core pillar of the company's identity. Founder and CEO Jesse Schell has long been a vocal proponent of sustainable growth, famously stating that the studio does not put jobs at risk to chase rapid expansion. The reality of the 2026 gaming market, however, has finally breached the walls of one of the industry's most conservative operators.[3][4]

The cuts affect multiple departments across the studio, which had grown to roughly 150 employees prior to the restructuring. Affected staff members began posting on professional networks late last week, prompting the studio to issue a formal confirmation of the 10% reduction to industry press.[1][2][3]

Schell Games' leadership cited broader industry headwinds and the shifting economics of the virtual reality market as the primary drivers behind the decision. The studio has historically relied on a dual-revenue model, balancing original IP development with steady work-for-hire educational and enterprise contracts.[2][4]

That diversified approach insulated Schell Games during previous industry downturns, allowing them to retain talent when other studios were forced to shed headcount between major project milestones. But the current contraction in the games industry, which saw over 10,000 jobs lost in 2024 and continued bleeding through 2025 and 2026, has fundamentally altered the contracting landscape.[1][4]

The virtual reality sector, Schell Games' primary domain, has faced its own distinct pressures. While hardware like the Meta Quest 3 has established a solid install base, the software ecosystem remains fiercely competitive and heavily reliant on platform-holder subsidies, which have tightened significantly over the past two years.[2][3]

'Among Us VR', co-developed with Innersloth, was a massive commercial success that brought Schell Games unprecedented mainstream visibility. Yet even the financial buffer provided by a hit of that magnitude was not enough to shield the studio from the macroeconomic realities of the current development cycle.[1][3]

The loss of Schell Games' no-layoff streak is being viewed by industry analysts as a grim bellwether. If a studio that explicitly avoided the trap of pandemic-era over-hiring cannot maintain its headcount, the baseline cost of running an independent game development business may have permanently shifted.[1][4]