Financial troubles lead to company shut-down

38 Studios lays off entire staff, says source

Things are looking desperate for 38 Studios, as a source claims the company has laid off its entire staff.

A serious financial crisis at the studio has been cause for worry in Rhode Island, which offered the company a $75 million state-guaranteed loan as incentive to relocate from neighboring Massachusetts.

The Studio, founded by Boston Red Sox hero Curt Schilling, was several weeks late in paying a $1 million installement on the loan, which puts taxpayers on the hook for up to $112 million.

Rumors suggest company payroll was skipped altogether, benefits cut off, and sister studio Big Huge Games shut down.

Speaking to Gamasutra, the source said the Kingdoms of Amalur developer sent the following e-mail to employees this afternoon, announcing the layoffs:

"The Company is experiencing an economic downturn. To avoid further losses and possibility of retrenchment, the Company has decided that a companywide lay off is absolutely necessary"

"These layoffs are non-voluntary and non-disciplinary."

"This is your official notice of lay off, effective today, Thursday, May 24th, 2012."

This reportedly applies to sister studio Big Huge Games as well.

Another e-mail, shared with Kotaku, claims the situation has become desperate for employees, who have heard little or nothing from company management.

"38 Studios just laid off its entire staff, both Providence and BHG studios are being shuttered," begins the letter.

"We have not received a paycheck since April 30th."

"On May 15th, we found out we were not getting paid when our checks did not hit our accounts."

"Our medical insurance runs out tonight at midnight."

"We found this out when an employee’s pregnant wife was told by her doctor, this was on Tuesday 22nd May this week."

"The company has not communicated anything concrete to the team throughout this process, leaving team members to figure out insurance stop-gaps (where people could afford it), etc. on their own."

According to WPRI, 38 studios employed 379 people full-time as of March 15.

Neither 38 Studios nor Big Huge Games have responded to requests for comment.

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