Schell Games Cuts 49 Jobs in Second Layoff Round as VR Squeeze Deepens

Schell Games, the Pittsburgh studio best known for the I Expect You To Die series and its work on Among Us VR, has laid off a large share of its team for the second time in barely two months. The news first surfaced on October 30 through a Bluesky post by the husband of an affected employee, and the studio confirmed it on LinkedIn on October 31. According to MIXED, which cites figures the studio gave to Vertical Slice, 49 people lost their jobs, about 40% of the workforce. Road to VR reports that CEO Jesse Schell confirmed the 40% figure.

This is not just another headcount story. Schell Games has long been one of the steadiest names in virtual reality, a studio that shipped polished VR hits while also doing educational and work-for-hire projects, and Jesse Schell was publicly known for running a company that avoided layoffs. When a studio with that record cuts this deep this fast, it says a lot about the state of the VR market in 2026.

What the studio said

The company's LinkedIn statement was brief. "We're very sad to say that due to this challenging time in the game industry, Schell Games has found it necessary to lay off a significant number of employees in order to ensure a sustainable future for our studio," it read. The post added that the decision should allow the company to stay stable going forward, but that "it is incredibly painful as we are losing some fantastic talent."

The studio did not give a number in the post itself and did not name any cancelled projects. Instead it listed the disciplines affected, a list that reads like a cross section of the whole company: Unity and Unreal engineers, game artists, designers, sound designers, producers, marketers, IT support, educational game researchers, QA specialists and product managers. It invited studios that are hiring to get in touch, saying it was eager to help these developers find new homes.

Two rounds in one autumn

The first cut came at the end of August. Road to VR reported then that about 10% of staff were affected, and Game Developer counted roughly 14 people based on employee posts. In a statement to Good Virtual Reality at the time, as quoted by Road to VR, Schell said that after those layoffs the studio had "about 125 staff," and that this was its first round of redundancies in 24 years.

His explanation in August pointed at a shift in strategy rather than a single failed game. "We had been on a path working on a smaller number of larger titles, but the way the industry is right now, it became very clear that working on a greater number of smaller projects is what will be sustainable," he said, adding that headset VR, once about 80% of the studio's work, had fallen to around 30%. Taken together with the new round, the numbers line up: 49 people from a team of about 125 is close to the 40% now reported. Inven Global estimates that roughly 76 people remain, although that is its own arithmetic, and the studio's About page still advertises more than 150 team members.

What happens to the games

The studio founded in 2002 has a long VR catalog, including the I Expect You To Die trilogy, Until You Fall, Silent Slayer: Vault of the Vampire, Among Us 3D (the renamed Among Us VR) and Project Freefall. Its next announced title is Dragon Grove, a cozy mixed reality puzzle game revealed at Meta Connect in September for Quest 3, Quest 3S and Meta's VR glasses, with a spring 2027 target. UploadVR describes it as still in development, but both MIXED and Inven Global note that Schell Games has not said whether the layoffs affect it. Until the studio says otherwise, that spring window should be read with some caution.

A brutal year for VR studios

Schell is far from alone. UploadVR's list of 2026 VR casualties is long: layoffs at Mighty Coconut, Kluge Interactive, Survios, Camouflaj and Combat Waffle, and outright closures at Sanzaru Games, Twisted Pixel, Armature, Polyarc Games, Vertigo Games Amsterdam and two internal nDreams studios. Road to VR has pointed to what it called Meta's rash of VR studio closures earlier in the year, along with cancelled projects at studios such as Sanzaru and Polyarc. For an independent studio that depends on a mix of its own games and client work, fewer publisher deals and a smaller audience quickly add up to the kind of decision Schell made last week.

Our take

The most telling detail is the August quote: when a VR specialist says headset work has fallen from 80% to 30% of its business, the market has already spoken. Schell Games is doing what many independent studios are being forced to do, shrinking and diversifying into smaller projects instead of betting on a few big ones. That may keep the doors open, but it also means fewer of the ambitious, handcrafted VR games that made the platform worth owning. VR players should watch Dragon Grove closely, since its fate will show whether Schell still sees a future in headsets. Developers should note something else: the studio openly listed who it let go and asked others to hire them. If you are building a team, that list is a rare chance to pick up experienced people.

Sources