Develop has been told that Warrington-based Juice Games is set to cut around a third of staff.
According to sources, the move has come about due to the imminent cancellation of a 'high risk project', part of moves to combat the worsening economic climate.
As a result, approximately a third of the THQ studio's staff will be made redundant, but the studio will remain open and working on its remaining projects.
The studio was founded in 2003 after the demise of Rage, and won the Develop Industry Excellence Award for Best New Studio in 2005. It is best known for the multi-million selling Juiced franchise.
Develop contacted the studio at the time of going to press, but no-one was available for comment.