38 Studios reportedly lays off entire workforce

38 Studios is now Zero Studios, as reports come to light that the Kingdoms of Amalur developer has fired all of its 350+ employees following significant financial difficulties.

An anonymous source “familiar with the company” has told Polygon today that the developer has effectively gone under completely, laying off all staff at both its home studio as well as at Big Huge Games, based in Baltimore.

Project Copernicus

The unreleased Project Copernicus

The news comes after a week of drama at the company – who reportedly defaulted on a payment which it then tried to cover before paying employees. That $1.125 million bill is now paid, but it looks like the company will not recover. Earlier this week, Rhode Island officials got together with 38 Studios to discuss layoffs as well as the financial woes.

Job cuts seemed inevitable, as 38 allegedly canned all contracts and laid off all part-time and casual staff. Soon after, we heard that CEO Jen MacLean and senior VP of product development John Blakely had lost their jobs – and that news was quickly followed by the revelation that they were not alone.

Not that it needs it, but the saga attracted even more drama as it was revealed that the studio – founded in Massachussetts – may miss out on valuable state tax help as it was not incorporated in Rhode Island.

38 Studios released Kingdoms of Amalur: Reckoning in February, to positive reviews and mediocre sales. A follow-up in the same universe, an MMO codenamed Project Copernicus was in development.

The studio had relocated to Rhode Island in 2010 thanks to a $75 million loan from the state, which believed the game developer would bring “hundreds” of jobs and millions of dollars to RI. As part of the agreement, if the studio defaults on the loan, all intellectual property created by 38 Studios belongs to the state of Rhode Island – while taxpayers must foot the bill.

The international games industry is deeply saddened by the news, with many studios reaching out to the newly-unemployed via the Twitter hashtag #38jobs.

Tags: , , ,

Facebook Google+ Linkedin Pinterest Reddit Stumbleupon Tumblr N4G Twitter