Double Fine's union drive collapsed over who counted as a manager, Kotaku reports

A 42-person petition at the Psychonauts studio was withdrawn two weeks after filing in May. All eight organisers were later among 23 people laid off, which Tim Schafer says was not the reason they...

AI-drafted from 4 sources. This story was written with AI from the outside reporting listed under Sources, and checked by automated tools before it went up. The originals have the full detail.

The union drive at Double Fine Productions fell apart over who was allowed to join, and the argument left the studio behind Psychonauts badly split. That is the picture from a long Kotaku investigation published on 9 October, which includes an hour-long interview with founder and CEO Tim Schafer.

Workers filed their petition with the National Labor Relations Board in early May 2026, while Double Fine was still owned by Microsoft. According to Aftermath, it covered 42 regular full-time and part-time employees, and the Communications Workers of America (CWA) said the petition was withdrawn about two weeks after filing. At the time the union gave no reason.

A flat studio meets labour law

The reason, as Game Developer summarises Kotaku's reporting, was eligibility. Under US law, managers with the power to hire and fire cannot join a union. Double Fine's flat structure meant many employees had been managers at one point or another, so it was unclear who counted. Attempts to settle that were tangled up with a second argument: some staff believed a union would destroy the studio's culture.

Kotaku's sources describe a workplace already divided. They point back to what staff call "The Bad Meeting", a heated discussion about crunch shown in the 2023 documentary Double Fine PsychOdyssey, and say the real meeting was more hostile than the film showed. During the union drive, one eligible employee reportedly opposed it loudly and publicly, at one point yelling at a colleague and bringing them to tears. One ineligible worker said union supporters answered questions about eligibility in unofficial channels while opponents fought the effort in company channels. A manager who could not join said the conversations showed "immense dysfunction".

This was the studio's second attempt. An earlier push began in 2019, after Schafer celebrated unions in a comedy set at GDC 2019, and stalled during the pandemic.

Layoffs and independence

Double Fine became independent of Microsoft over the summer, and shortly after announcing that in July it laid off 23 people. Kotaku reports that all eight organisers who signed the petition withdrawal letter were among them. Schafer denied any link. "That's definitely not the reason," he told Kotaku. "We didn't target people for layoffs." He said he had stayed out of the union discussions because of his role: "I felt like I couldn't interfere between eligible employees talking."

The laid-off staff told Kotaku their severance was generous. "I thought it was important to match Microsoft," Schafer said.

For a studio that has long been held up as a model of a healthy, creator-led company, the report is an uncomfortable read. It also shows a practical problem other small, flat studios may hit: US union rules were written for organisations with a clear line between staff and management, and many indie teams do not have one.

Sources

Image: Double Fine Productions via Game Developer

More news from Gaming World