Schell Games announces second round of 2026 layoffs

Schell Games announced a second round of 2026 layoffs on Oct. 30, 2026, cutting staff across every department at its Pittsburgh studio after August reductions that were its first since 2002.

Schell Games has not said how many employees the cuts affected, but Heise Online reported that 49 employees will leave, about 40 percent of the workforce, according to the company. Industry magazine Vertical Slice established the full scale after employees posted about the cuts on social media, and the studio then issued an official statement. The cuts touch engineering, art, design, sound, marketing, information technology support, research, quality assurance and specialists using the Unity and Unreal engines. Schell Games asked prospective employers to hire affected staff, naming engineers, artists, designers, sound designers, producers, marketers, IT support, researchers, quality assurance staff and product managers.

October’s round is far larger than the August reduction and removes a significant share of a team that had already shrunk once in 2026. Those August cuts removed about 10 percent of the workforce and left roughly 125 staff. According to VR.org, employee LinkedIn posts indicated around 14 people lost their jobs on Aug. 21, 2026, but the studio issued no public statement and the figure is a reasonable floor rather than a confirmed headcount. Schell Games’ careers website still claims the studio has never laid anyone off despite the 2026 reductions.

CEO Jesse Schell has argued that layoffs are a choice and that studios should focus on stability. In a July 2024 GamesIndustry.biz piece titled “Life without layoffs,” he said he would rather risk capital on games than jobs. “If a company needs to do a layoff, it’s a smart idea to do it when everybody else is doing it,” Schell said. He has also said, “At the heart of it all is choosing not to put jobs at risk.”

Pittsburgh-based Schell Games built its reputation on the I Expect You To Die puzzle series and by co-developing the virtual reality version of Among Us, later released as Among Us 3D. Among Us VR came out in November 2022, later received a flatscreen version, and Innersloth renamed it Among Us 3D while handling publishing throughout. It also develops educational VR experiences and recently released I Expect You To Die 3, Silent Slayer: Vault of the Vampire, which launched in October 2024, and Project Freefall, a free-to-play skydiving brawl, shipped in October 2025 and remains on the market.

The studio is still developing Dragon Grove, a cozy or mixed-reality puzzle game commissioned by Meta, set for release in spring 2027 on Meta VR Glasses and Quest 3. Outside of games, the studio handles museum installations, training and classroom XR, or extended reality, and it pairs original IP with contract work for education clients, museums, location-based entertainment and corporate training. The October layoffs do not affect Among Us 3D, because the multi-year arrangement behind the game concluded before the cuts and Innersloth has taken over player support with monthly cosmetic drops continuing.

The layoffs fit a 2026 VR-industry contraction that has closed Sanzaru Games, Twisted Pixel, Armature, Polyarc, Vertigo Games Amsterdam and two nDreams studios, while Mighty Coconut, Kluge Interactive, Survios, Camouflaj and Combat Waffle have made cuts. Polyarc, the developer of Moss, closed in September 2026 following earlier layoffs in March, and 29 employees lost their jobs; the shutdown arrived about six months after major layoffs in March. In April 2026, Polyarc cut staff, and Survios collapsed outright in May 2026; by late July, studios that had shut a game, a division or the whole company numbered in double digits. Since Meta changed course on funding VR games and closed its own VR studios, dedicated VR teams have faced repeated losses, and the ASGC Games Industry Layoffs Tracker projects 13,077 game industry layoffs for the full year.

VR.org said VR-native studios are operating with almost no margin for a miss because Meta cut its own first-party output and no third platform has arrived at consumer scale. GameForceAsia said hardware adoption rates and consumer software spending remain constrained across dedicated VR development, and the loss of experienced technical talent challenges the immersive sector because specialized interaction design and performance optimization require years of hands-on expertise.

The Escapist and UploadVR said Schell Games cut Ashley Godbold in the October round, noting that the news came through a Bluesky post from her husband Kyle Hilliard. VR.org said a principal engineering manager who kept his job wrote that the industry was hemorrhaging. Marketing director Dwayne Waite Jr. said the August reductions hit his team and he named four people, while a senior public relations manager of nearly six years also discussed the layoffs.

By August 2026, the studio’s share of work on VR-only games had fallen from 80 percent to about 30 percent as it turned to smaller parallel projects and VR-adjacent work including interactive projection for location-based entertainment. The Escapist said fewer staff could affect support for the studio’s other VR games, including I Expect You To Die, though Schell Games has not announced closures or changes to shipped titles. Owners can still buy the I Expect You To Die trilogy and Silent Slayer on Steam and Quest, while cuts to marketing, art, design and visual effects affect future production rather than live service.