5th Cell, creator of the Scribblenauts series, platformer Drawn to Life and Xbox 360 shooter Hybrid, has been forced to cut a number of positions.
According to tweets from former lead animator Tim Borrelli, artists, programmers, designers, QA and IT workers are among the 45 staff laid off.
Borrelli stated that the first round of losses took place last week during GDC, and added that on Monday March 21st “they shut the studio down”.
However, 5th Cell has since issued a statement denying that the entire developer has been closed.
It also revealed that the redundancies were the result of a cancelled project.
Although not confirmed, the project may be linked to the failed crowdfunding campaign for Anchors in the Drift. Launched on Fig late last year, the title fell short of its $500,000 goal by nearly $400,000.
"Unfortunately, due to a project cancellation, we have had to let go of 45 of our very talented staff members today,” the company said.
“Layoffs aren't something we take lightly and we'd like to thank all our employees for all the hard work and dedication over the years.
“5th Cell as a company is not closing down, but our focus right now is 100 per cent on helping our staff make the transition to other external opportunities.
“If we haven't already reached out, any interested employer can reach us at email@example.com."