Schell Games has announced a second round of 2026 job cuts, sharpening concerns about VR game studio layoffs and the pressure facing partner-driven studios.
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Schell Games has cut staff again after ending a 24-year no-layoff run
Schell Games has announced a second round of layoffs in 2026, only months after the Pittsburgh developer made its first staff reductions since its founding in 2002. The studio said in a LinkedIn statement, quoted by GamesIndustry.biz and UploadVR, that “due to this challenging time in the game industry” it had become necessary to lay off “a significant number of employees” to secure “a sustainable future” for the company.
The studio did not disclose an official headcount for the latest cuts in that statement. That creates an important reporting gap. GamesIndustry.biz says the affected roles include engineering, art and design, sound, marketing, IT support, research, and QA. The Escapist, citing its own reporting on the same round, puts the figure at 49 additional jobs and says Ashley Godbold was among the employees let go in October. The confirmed company line is that the number is significant. The reported figure from The Escapist is 49.
That distinction matters because the story is partly about scale and partly about timing. Schell Games had already reduced staff in August, a round CEO Jesse Schell described as rebalancing according to The Escapist. That earlier layoff reportedly left the company with roughly 125 employees and affected departments including marketing, art, design, and visual effects. Two cuts in quick succession change the read on the first move. What could be framed in August as a painful correction now looks like a deeper reset of the studio’s operating model.
The studio’s old stability pitch is now under stress
The tension is sharper because Schell Games had built a reputation around avoiding layoffs. GamesIndustry.biz notes that the August cuts were the first such reductions since the company was founded in 2002. It also points back to Jesse Schell’s 2024 comments to the outlet, where he argued that avoiding layoffs required prioritizing stability and giving that priority “a lot of time and thought and attention.”
Those comments now read less like hypocrisy and more like a case study in how hard stability has become to defend in the current market. Schell also told GamesIndustry.biz in 2024 that layoffs can become self-reinforcing across the industry, with companies choosing to cut when others are cutting because it makes the move appear tied to the broader economy rather than a single firm’s weakness. The company’s 2026 position fits uncomfortably inside that observation. Schell Games says the cuts are meant to keep the studio stable going forward, while the second round itself signals that the first adjustment was not enough to settle the balance sheet or future workload.
For readers tracking Schell Games layoffs as a measure of studio health, the key confirmed fact is not that any one project has failed. The sources do not identify a single cancellation, client loss, or release underperformance as the cause. The confirmed fact is broader: a long-running independent VR and interactive media studio has cut across multiple disciplines twice in the same year after decades without doing so.
The VR mix has changed, and that is the strategic fault line
The strongest business signal in the source material is Schell Games’ shift away from headset VR as its dominant workload. The Escapist reports that headset VR once made up around 80% of the studio’s projects, but by August that share had fallen to about 30%. It says the studio had been moving toward VR-adjacent work, including interactive projection for location-based entertainment.
That is the core strategic issue behind the latest Schell Games job cuts. A studio built with deep VR expertise can survive a platform cycle if demand is steady, if a platform holder funds enough work, or if its own games generate reliable long-tail revenue. The sources do not prove which of those supports weakened at Schell. They do show that the studio’s project mix had changed substantially before the second layoff round, and that the affected roles now stretch across production, support, research, and operations.
This is where the work-for-hire pressure comes into view. Schell Games is known for its own I Expect You To Die franchise, but it has also worked on partner-linked and commissioned-style projects, including the VR adaptation of Among Us and educational VR experiences, as noted by GamesIndustry.biz. When a studio depends on a combination of original IP, partner work, platform initiatives, education projects, and location-based experiments, headcount has to match a pipeline that may not be fully under the studio’s control. The available reporting does not say Schell lost a particular contract. It does support a narrower conclusion: studios whose staffing is tied to specialized VR demand and external project flow are facing a harsher planning environment in 2026.
Among Us 3D players appear protected by the handoff to Innersloth
The immediate player-facing question is whether these Among Us VR developer layoffs affect Among Us 3D. The available sources point to a limited direct impact. The Escapist reports that the four-year partnership behind Among Us 3D had already ended before this layoff round. It also says Innersloth has taken over player support following a handover update, with monthly cosmetic drops continuing under Innersloth’s control.
That does not erase the importance of Schell’s role in the game’s history. GamesIndustry.biz identifies Schell Games as co-developer of the VR adaptation of Among Us, while UploadVR lists Among Us 3D among Schell’s past projects alongside I Expect You To Die, Silent Slayer: Vault of the Vampire, and Project Freefall. But based on the sourced reporting, Among Us 3D is no longer where the current operational risk sits.
For players, the practical read is simple: the layoffs are serious for Schell Games staff and for the studio’s future capacity, but the reporting says Among Us 3D support has moved to Innersloth and is expected to continue. For Schell’s own catalog, including I Expect You To Die, the picture is less specific. The Escapist raises the possibility that fewer staff could affect support for the studio’s other VR games, but no source material provided here confirms a support cut, shutdown, delay, or content cancellation for those titles.
Schell’s cuts land in a brutal year for VR teams
The second round at Schell Games is not happening in isolation. UploadVR reports that 2026 has seen a wide group of veteran VR teams affected by layoffs or closures. Its list of studios that have gone through layoffs includes Mighty Coconut, Kluge Interactive, Survios, Camouflaj, Schell Games, and Combat Waffle. It also reports closures at Sanzaru Games, Twisted Pixel, Armature, Polyarc Games, Vertigo Games Amsterdam, and two internal nDreams studios.
The Escapist adds further detail on Polyarc, reporting that the Moss developer shut down after almost 12 years and that 29 employees lost their jobs, following major layoffs at the studio about six months earlier. The same article says the broader games business remains under pressure, citing the ASGC Games Industry Layoffs Tracker as projecting 13,077 game industry layoffs for the full year.
Taken together, those reports make the latest VR game studio layoffs feel less like isolated underperformance and more like a platform-sector contraction. That does not mean every VR studio shares the same cause or balance-sheet problem. It does mean the market is sending a consistent signal: specialized immersive teams are being forced to shrink, close, or reposition while the wider games industry remains in a prolonged layoff cycle.
Dragon Grove now becomes a test of the next Schell Games
Schell Games still has announced future work. UploadVR reports that the studio is developing Dragon Grove, described as a cozy free-to-play 3D puzzler announced at Meta Connect and expected to launch in spring 2027 for Meta VR Glasses and Quest 3. That makes the layoffs especially important to watch because the studio is not simply winding down public activity. It is attempting to move into a new product and platform context while operating with reduced staff.
No source provided here confirms whether Dragon Grove’s schedule, scope, or post-launch plans have changed because of the layoffs. That is the key unanswered question. A free-to-play puzzle game on Meta hardware carries different operational demands from a premium escape-room-style VR series. It may require ongoing content planning, live operations judgment, and careful audience building. GamesIndustry.biz’s list of affected disciplines includes marketing, QA, engineering, art and design, and sound, which are all functions that matter to shipping and sustaining a game. The sources do not say Dragon Grove is in trouble, but they do show that the team around Schell’s future work is smaller.
From a strategy perspective, the studio now has to solve two problems at once. It needs to preserve the trust built by I Expect You To Die and its broader VR catalog, while proving that its next mix of headset VR, VR-adjacent installations, partner projects, and original releases can support a stable business. That is a harder game state than Schell Games faced at the start of 2026.
The useful read is caution, not panic
For players, there is no sourced reason in the provided material to assume Among Us 3D is shutting down. Innersloth has taken over support, according to The Escapist, and monthly cosmetic drops are set to continue under its control. There is also no confirmed cancellation in the source material for I Expect You To Die or Dragon Grove.
For developers and industry watchers, the Schell Games layoffs are a sharper warning. The company had history, recognizable VR brands, educational and interactive experience work, and a public leadership philosophy built around avoiding layoffs. Even that mix did not prevent two rounds of cuts in 2026. That is why this story reaches beyond one studio. It shows the pressure on VR specialists and partner-dependent developers when the market no longer rewards staffing for a larger pipeline than the confirmed work can support.
The next meaningful updates will be concrete ones: an official affected headcount from Schell Games, any statement on project schedules, new Dragon Grove details, or changes to support plans for the studio’s existing catalog. Until then, the safest conclusion is also the most sobering one. Schell Games is still operating, but its second cut of the year confirms that even long-stable VR studios are being forced to play defense in 2026.