As many as 100 staff at independent studio Day 1 have been made redundant, an alleged source close to the matter has said.
The Chicago studio is claimed to have axed a significant portion of its workforce after a project funded by Japanese publisher Konami fell through.
Neither Day 1 nor Konami has responded to requests for comment.
But a purported anonymous source has informed Gamespot that the studio had been funded for another project based on the Silent Scope series, resulting in redundancies for “95 per cent” of the project team.
“A significantly smaller team remains at work on a second in-development project,” the Gamespot report added.
Konami, which owns the IP to Silent Scope, has not brought a new edition of the series to market since 2002.
Last year, Day 1 announced it is developing FEAR 3 for Warner Bros.