Veteran VR studio Schell Games has announced another round of layoffs, its second in 2026.
This news was first brought to our attention via a BlueSky post from Kyle Hilliard, the husband of one of the affected employees, Ashley Godbold.
Schell Games laid off a large portion of its staff today, including my wife, @ashleygodbold.bsky.social, and many other talented developers. She’s asking them to reply to this post with their info.
If you’re looking to hire, keep an eye on this thread.
— Kyle Hilliard (@kylehilliard.com) 2026-10-30T19:26:39.330Z
Schell Games formally announced the layoffs with the following statement on LinkedIn:
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. While this will enable us to stay stable moving forward, it is incredibly painful as we are losing some fantastic talent.
This is Schell’s second round of layoffs this year. The first was in August, with an employee commenting at the time that the cuts were due to the industry ‘hemorrhaging,’ echoing the sentiments of Mighty Coconut founder Lucas Martell when announcing his company’s second round of layoffs in 2026.
Mike Johnson
2026 has seen a number of tenured VR teams either affected by layoffs or closing down entirely. Mighty Coconut, Kluge Interactive, Survios, Camouflaj, Schell, and Combat Waffle have all gone through layoffs while Sanzaru Games, Twisted Pixel, Armature, Polyarc Games, Vertigo Games Amsterdam (formerly Force Field Entertainment), and two internal studios within nDreams have all shut down.
Schell Games is currently developing Dragon Grove, a cozy 3D puzzler announced at Meta Connect expected to launch in spring 2027 for Meta VR Glasses and Quest 3. Its past projects include the I Expect You To Die series, Among Us 3D, Silent Slayer: Vault of the Vampire and Project Freefall.
