Trion Worlds has laid off as many as 40 developers at the studio.
This follows the release of fantasy RPG Rift's first expansion Storm Legion by just one month.
This expansion has already been made available for free.
According to Gamasutra, about 40 developers are now out of work from across multiple disciplines including artists and designers.
Trion has said the layoffs were "in response to market conditions, product timelines and the natural evolution of our company", but did not confirm the cuts occured within the Rift team or how many jobs have been lost.
The news of layoffs at Trion Worlds comes shortly after Petroglyph, which was developing End of Nations for the publisher, also laid off 19 staff.