Auto Club Revolution developer Eutechnyx has been hit by a round of layoffs that has seen 12 employees lose their jobs.
A source close to the matter has told Develop that the redunancies have affected staff across a range of disciplines including QA, art and producer roles.
Some staff have also been loaned to nearby Ubisoft-owned studio Reflections.
The layoffs come after around ten staff were let go in June last year, again across various roles.
Develop has also learned that Eutechnyx closed its London office in June last year, which had housed as little as five staff, who were then offered employment in Gateshead following the closure.
Speaking on the matter, the studio's CEO Darren Jobling said it was unfortunate the studio had to make staff redundant, but stressed last week's layoffs represented less that ten per cent of the company's total headcount.
He said Eutechnyx currently employs 131 staff, with other sub-contractors also working at the company.
He added that the redundancies were part of studio-wide restructuring as it looks to move away from the work-for-hire model, and despite the layoffs, turnover had grown by 30 per cent in the last year. He also stressed that the loan of employees to Reflections was part of normal collaborative efforts with the developer, which has also seen staff move from Ubisoft to Eutechnyx.
"On Friday, we made unfortunately 12 people redundant. It was part of restructuring at the company," said Jobling.
He added: "We've made no bones about the fact we wanted to move away from being a work-for-hire developer on consoles to publishing our own titles, so it's highly regrettable that we did have to make 12 people redundant."
Despite the layoffs, Eutechnyx is releasing three games this week, including NASCAR 14, and Jobling said it also has plans for expanding its portfolio into China.