Rumor: Big Layoffs At Heavy Iron Studios [Update]

We've learned over the weekend that most of the employees at Heavy Iron - a former THQ subsidiary that's best-known for its movie tie-in games - may be spending the holiday season looking for a new job.

Sources have told Kotaku that around 60-70% of the studio's staff are to be laid off this week, most likely on Wednesday. This week being Christmas. With a total headcount of just over 100, that's a sizable percentage of the studio's total workforce.

Losing your job is never a good thing, but losing it over Christmas? That makes it twice as hard.

Heavy Iron were once a THQ studio, responsible primarily for games based on Disney/Pixar cartoons, though they also released Evil Dead: Hail to the King. The company were let go from THQ earlier this year as part of the publisher's cost-cutting measures.

Update: Before rumored cutbacks, Heavy Iron studios staff is closer to 60 employees total, according to a secondary source, having been downsized from 120 employees over the course of several rounds of layoffs. The developer still has an ongoing project in the works, according to that source.

Update 2: Crisis talks have averted the proposed layoffs, internal sources tell Kotaku, those originally earmarked for the sack instead being kept on temporarily as a "calculated risk" for the company following talks with publishers over the past two weeks.

The status of those employees will be reassessed next month, we are told.