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.

The Salt Lake City Weekly has a comprehensive roundup of the Sensory Sweep fiasco, and it won't fill you with holiday cheer. But I do encourage you to read it out of respect for these workers and their families, caught up in the studio's deceptions and paid in promises for a year.

In addition to the unpaid wages, the company had stopped paying insurance premiums and 401(k) contributions, even though workers' checks (when they were getting them) had still been deducted for them. The lack of insurance means former employee Paul Grimshaw is looking at bankruptcy over an unpaid dental claim.

The federal government, which negotiated the back-pay deal way back in January, is using threats of jail to collect back taxes from founder Dave Rushton and his wife Maureen, but not to get destitute employees the money they were owed. In other words, some guy and his wife made money off people's free labor, and the government's first in line to be paid, not the workers. Utah's Labor Commission needs prosecutors if it's going to bring state criminal charges against an employer who does not pay, and that kind of case hasn't been brought in 10 years.

Oh, and speaking of taxes? A former employee, who sent us this tip, told Kotaku that his (and others') Social Security taxes hadn't been paid in 2007, so workers are on the hook for that, too.

A former studio employee, commenting on the Salt Lake Weekly's article, sums up how Sensory Sweep was able to keep going even when the checks weren't:

"One of the most frustrating things about being a former Sensory Sweep employee was watching other people young to the industry walk into the company while it was floundering. Those kids would end up being paid in promises and optimistic half-truths, and they just didn't have the available experience to know any better."

It is sad. Jobs in this industry are incredibly competitive because so many want to work in it, and will make great sacrifices to do so, and are reminded by people on the outside that this is somehow a dream job others would be happy to do for free. Speaking personally, I clench my fists every time I read someone say that kind of thing so casually. And out in Utah, where people also had mortgages, student loans, families and no other jobs in the industry to seek, I can see how that helped keep Sensory Sweep's charade going.

Sensory Sweep Shortchange [Salt Lake City Weekly]

SCEA's Patrick Seybold confirmed to Kotaku the consolidation of the company's first-party QA operations, saying the decision was made to reduce costs and streamline its QA work through a single facility.

A source with knowledge of the Foster City operation told Kotaku that SCEA's location there had roughly 100 contract employees. Seybold didn't comment on exact numbers but did say "We also aim to have a contingency work force in San Diego," dependent on seasonal need, the same as in Foster City. Regardless, while Foster City's tester positions might be headed south this winter, the testers who held them probably won't.

"We can confirm that 39 positions were eliminated today at Harmonix as part of re-structuring to better align our staffing to best suit our product development plans and schedules moving forward," an MTV Games / Harmonix spokesperson told Kotaku in an e-mailed statement. "Those affected were primarily in QA. The others affected ranged from administrative to other various roles within the company."

Kotaku received word independently that at least one staff designer was among those laid off.

But the Rock Band publisher indicates that sales of Rock Band were not a factor, pointing to a shift in out-sourced and part-time QA at Harmonix rather than full-time testers.

The Beatles: Rock Band has sold more than a million copies worldwide according to the company, though the music gaming category has been softer this year. At an investors conference in New York yesterday, EA CEO John Riccitiello, whose company distributes Rock Band, said that packaged sales of Rock Band (meaning discs and instruments, not the vigorously downloaded add-on songs) was down by "hundreds of millions of dollars." Downloaded songs remain hot, with more than 60 million songs in Rock Band's 1000-song library paid for and downloaded date, according to MTV.

According to a report on Big Download, "over 50 percent" of Aspyr's workforce have recently been shown the door, with those remaining left to shamble around the company's now-spacious offices.

As an owner of an Apple computer (albeit my laptop, not my main desktop), it's be a shame if this turns out to be the case. It's not like there are many Mac publishers lining up to take Aspyr's place.

Large layoffs reported at Aspyr Media [Big Download]

That's Beautiful Game Studios, the developers of the Championship Manager series. A Square Enix statement reads "Our current business model does not allow us to compete in a fast-changing industry with any degree of flexibility or commercial confidence".

"To achieve this, we will be restructuring Beautiful Game Studios, which will regrettably bring with it unavoidable job losses."

Ironically, 2009 was the first year since the great Football Manager/Champ Manager split that Square Enix's series (well, it used to be Eidos' series) actually stood up to the might of Sega's superior game.

Square say that both the developer and the series will live on, but how strongly BGS will be able to compete next year after job cuts and a thinly-veiled public vote of no-confidence from Square Enix is anyone's guess.

Cuts hit Champ Man studio [Develop]

We've been told by sources directly affected by the cuts that roughly 50 developers (a sizeable number of Krome's total workforce) were let go from the company's Adelaide, Brisbane and Melbourne branches last Thursday and Friday. The main culprits? A super-high Aussie dollar (making US-backed development expensive) and what's described as a "lack of contracts".

Krome CEO Robert Walsh put a more official slant on the causes in the following statement, sent to GameSpot:

Regrettably, an undisclosed number of employees across each of Krome's three studio locations were informed they would be let go.

With declining game sales, the industry is really feeling the effects of the struggling economy. In spite of industry-wide cutbacks and Krome's need to reduce costs, we've worked really hard to minimise the impact on our staff. These cuts, while incredibly difficult as they affect the coworkers we consider friends, are necessary as we position Krome for the future. We're also actively pursuing several business opportunities which, if secured, will enable Krome to reemploy some of the staff given notice.

Krome also worked on the PS2 and Wii versions of the latest Transformers game, and were the creators of the last generation's Ty: The Tasmanian Tiger series.

An internal Electronic Arts memo confirms that Pandemic Studios was shut down today with a "core IP team" being moved to Electronic Arts' Los Angeles office. Among those let go were the studio's top three employees: Andrew Goldman, formerly the studio's CEO; Josh Resnick, formerly the studios president; and Greg Borrud, vice president of product development

"I want to make it clear that the Pandemic brand and franchises will live on," Nick Earl, EA Games Label Senior Vice President, wrote in the memo. "In the months ahead, we will announce plans for new games based on Pandemic franchises.

"This type of change can be difficult. But the situation calls for us to act decisively, to take control of our destiny and to run a stronger, more focused development operation. That's how we will continue to make great games in our LA studios."

Earl said that the move was made to "improve our cost structure, ensure quality and build schedule integrity for this studio."

Electronic Arts confirmed that about 200 people were let go.

Pandemic was formed in 1998. Following on the success of Full Spectrum Warrior, Mercenaries and Star Wars: Battlefront, they were purchased in 2007 by Electronic Arts.

After the purchase Pandemic released a succession of lacklustre sequels culminating in the cancellation of the costly Dark Knight game, which resulted in the closure of Pandemic's Brisbane studio.

These cuts appear to be part of EA's latest cost-cutting measures which includes the elimination of 1,500 jobs, cutting a dozen in-development games and closing "several facilities." According to multiple sources, those cutbacks include studios like Pandemic, Maxis and nearly the entire Command & Conquer team.

We first heard of the Pandemic layoffs a week ago. The same sources told Kotaku that the team working on Command & Conquer 4: Tiberian Twilight was warned of its fate last week, with almost the entire team expected to be let go after the real-time strategy game ships some time in 2010.

Also said to be affected heavily are Spore and former-Sims studio EA Maxis, social network gaming acquisition Rupture Studios, and Mercenaries and The Saboteur creators Pandemic Studios LA. Those development studios are said to be hit with substantial layoffs, according to a source, with remaining employees relocated to EA headquarters in Los Angeles and Redwood Shores.

EA is rumored to have already laid off staff at Tiburon, Mythic Entertainment and Black Box, reports which the company has yet to confirm.

The closing of Pandemic Studios is the latest in a long line of acquisitions and then closures or "integrations" in the company's long history. Over the years EA has acquired and later closed or absorbed employees from Origin Systems, Bullfrog Productions, Black Box Games, Maxis, Westwood Studios and Pandemic's Brisbane, Australia and Los Angeles locations.

"We will be hiring back positions in low-cost locations to maintain capacity," Brown said at the BMO Capital Markets Digital Entertainment Conference. Dow Jones Newswires had the quote first.

Brown didn't say how many jobs would be hired back, nor when or where they would take place. I'm also not even sure what "to maintain capacity," means. But I don't think we're talking about the really good gigs here.

Electronic Arts To Hire Back Workers In Low-Cost Locations [WSJ.com via Go Nintendo]

The "Cost Reduction Plan" detailed in the EA release involves the closure of several facilities and a huge reduction in workforce in order to "narrow its product portfolio to provide greater focus on titles with higher margin opportunities."

"This action will result in the closure of several facilities and a headcount reduction of approximately 1,500 positions, of which 1,300 are included in a restructuring plan. The majority of these actions will be completed by March 31, 2010. This plan will result in annual cost savings of at least $100 million and restructuring charges of $130 to $150 million."

News of the reductions comes in the same press release that reports record non-GAAP revenue for the 2nd quarter, with $1.147 billion up 2 percent from the same time last year, surpassing street expectations.

The release also mentions EA's $300 million acquisition of social network games developer Playfish, which we reported on earlier today. One could assume this means that Facebook games have "higher margin opportunities."

The release did not name which facilities would be seeing cuts, though rumors indicate that EA Tiburon, Black Box, Redwood Shores, and Mythic are among those seeing layoffs today.

Said to be affected are EA's Tiburon and Black Box studios, located in Orlando, Florida and Burnaby, British Columbia, respectively. The Tiburon studio is responsible for EA Sports' Madden, NCAA Football and Tiger Woods PGA Tour franchises, as well as its upcoming mixed martial arts offering, EA Sports MMA. Black Box has been largely responsible for the publisher's Need For Speed and Skate series.

Both developers were previously affected by layoffs over the past year as part of a previously announced restructuring plan.

Also rumored to be affected are EA Redwood Shores' quality assurance team and Mythic Entertainment. Tweets from ex-staffers at those studios indicate "huge chunks" let go at the former, approximately 40% laid off at the latter.

Rumors of Electronic Arts' plans to cull staffers began circulating last week. The cutbacks appear to have been rolled out over the course of the past few days, ahead of EA's quarterly earnings report and alongside confirmation of the publisher's acquisition of Playfish, said to be a $300 million investment in the social gaming developer.

Those cuts extend to "hundreds" of EA employees and unspecified game projects, according to tipsters.

We've contacted Electronic Arts for confirmation on the cutbacks, but have not yet heard back.

"There's an ongoing process of reshuffling people, but that's not something we do just because of integration," Square Enix president Yoichi Wada explained to website GamesIndustry. "As an ongoing process that's taking place all across the organization looking at all of our foot prints — Square Enix Tokyo, Taito and ex-Eidos offices, have seen about 10 per cent reduction of headcount globally."

Previously, we floated the rumor that Square Enix Japan has reduced its workforce by somewhere between 200 and 300 workers.

Wada describes the integration of new developer Eidos in the Square Enix corporate framework as "smooth" — smooth being a relative term and certainly not referring to those who have suddenly found themselves redundant.

Square Enix: Global headcount reduction around 10% // News [GI]

Word of the San Mateo, California based developer being hit with layoffs came earlier today via Kotaku tipsters, with quiet mention of the cutbacks hitting Twitter, Facebook and LinkedIn, the latter two home to "ex-Slipgate Ironworkers" groups. We reached out to a few ex-Slipgate employees who confirmed that they were no longer with the company as of this week, estimating that around 50 staffers were let go.

According to a statement from Gazillion—home to Gargantuan, NetDevil, Slipgate and The Amazing Society—the team at Slipgate Ironworks is now officially smaller, with some of the affected employees being placed at other positions within the company. Slipgate's MMO project, which John Romero briefly detailed a few years ago, is said to continue with a new format.

"Gazillion has enjoyed remarkable growth over the past year and is proud to be partners with revered, world-class brands," reads a statement. "We have expanded our number of studios from one to four and our MMO portfolio from two games to a slate of titles. As part of our focus on reaching the widest possible audiences with breakthrough MMO entertainment, we decided to change the format of our project at Slipgate Ironworks to better achieve this aim."

That may mean some changes from the game's original vision, according to Gazillion.

"The game we'll launch will build on the efforts to date with a smaller core team and the other Slipgate staff are already in discussions around the many open positions across our slate of projects," the statement notes. "2010 will be an exciting year for Gazillion as we bring several groundbreaking MMOs to markets worldwide. We're tremendously appreciative for the dedication and creativity of our employees who make this all possible."

Gazillion Entertainment signed a 10-year-long deal with Marvel Entertainment earlier this year to produce a number of titles based on the comic book publisher's properties. Slipgate was said to be working on an original property for Gazillion, not related to the Marvel deal.

Sources claiming to have knowledge of the situation estimate that some 30 employees were laid off earlier today. Shaba was responsible for the previously mentioned Spider-man game, ports of the Tony Hawk series and Shrek Super Slam, all for Activision.

The cutbacks put an end to Shaba's 12 year existence.

The publisher was alleged to have made similar-sized cuts at the recently purchased 7 Studios yesterday. In other words, if you work for a wholly owned Activision studio, it might be wise to update your resume.

Update: Reps for Activision have provided the following statement regarding Shaba Games' closing: "Activision continually evaluates the resources at our studio properties to ensure that they are properly matched to our product slate and overall strategic goals. As part of this process, we recently made the difficult but necessary decision to close Shaba Studios. We are grateful for the studio's contributions and wish this talented team success in their future endeavors."

The Los Angeles based 7 Studios was at the heart of an ensuing lawsuit filed by Scratch publisher Genius Products and turntable controller maker Numark Industries. That suit alleged that Activision and 7 Studios conspired to withhold Scratch the Ultimate DJ "in an effort to delay the development and release of Scratch and to gain access to proprietary technology."

Activision denied any wrongdoing in its purchase of 7 Studios, saying the buy out was made to "bolster its development capabilities," that it "provided the fledgling developer with much needed financing during these difficult economic times."

Scratch the Ultimate DJ ultimately found a new developer in Commotion Interactive.

Activision reps provided the following statement to Kotaku.

"Since the completion of its acquisition by Activision, 7 Studios has realigned its business to focus its development resources on the music genre. As a part of this realignment, the studio is reducing its workforce to better reflect Activision's upcoming slate of music-based games."

The 30 or so employees let go today represented approximately half of the entirety of 7 Studios, according to our source. We're attempting to get confirmation from Activision on the accuracy of that figure.

The lay-offs occurred this past Wednesday, September 30, and accounted for a third of the studio — primarily coders and QA staffers. The reason for the cuts apparently is that the studio was hoping to ink a deal for a movie-based game with a publisher, but that deal went south this week.

An internal email from studio CEO Mike Fegan reveals that Transmission was pitching another project in a well-known franchise to that same publisher:

We finally heard back from XXXX this morning and the news is mixed as [licensed movie game] is currently on hold due to a legal IP problem with the film and no indication on when this issue will be fixed. As part of our fall back plan we have now submitted a pre-prepared pitch for [a sequel to an existing IP] and they also want us to pitch on another project but the reality is we will not have another project in place with them for at least 60-90 days.

As Kotaku Australia points out, the studio also wasn't able to find a publisher for arcade style helicopter game Rotorhead. The upside? Emails obtained by Kotaku Australia indicate that Transmission will be hard at work on another cricket game codenamed Cricket 2010 for release next year. The studio's previously announced flight sim is still in production and will be published by Evolved Games.

Transmission Games Lays Off A Third Of Its Workers [Updated] [Kotaku Australia]

The company behind the Final Fantasy and Dragon Quest, Square Enix, is rumored to be trimming down its workforce, we hear. Apparently, somewhere between 200 and 300 Square Enix Japan employees will lose their jobs.

If true, this could simply be a corporate reorganization after the acquisition of Eidos Interactive, which is schedule to be renamed Square Enix Europe. Taito is also under the Square Enix Japan umbrellas, so these rumored lay-offs could also be Taito-related.

Square Enix recently released Dragon Quest IX for the Nintendo DS. The game has sold over 3.7 million copies in Japan.

We are following up with Square Enix regarding this lay-off rumor.

If not, he's probably best known—in addition to his contributions to Spore—for one of his Game Developers Conference talks, in which he described the Wii as "a piece of shit" and slammed Nintendo for its hardware design choices. He later apologized for those remarks.

He may also be recognized from his rant Do Your Job Well, Please, an editorial delivered at this year's GDC on video game journalism.

By Hecker's estimate, the cutbacks at Maxis numbered 24 (he thinks). He estimates in his personal list of contributions to Spore that some 80 people were working on the game as development wrapped up.

Hecker announced on his personal site his follow up project, an indie game called SpyParty, which he describes as "a very different multiplayer espionage game" that apparently offers a level of excitement on par with ski jumping away from massive explosions.

Elvis Has Left The Building [Chris Hecker's Website]

In a prepared statement released to Kotaku today, Activision confirmed that Raven, a subsidiary of the company, had laid people off today, but declined to confirm or deny the number of people impacted.

"With the recent completion of both X-Men Origins Wolverine, based on the summer blockbuster movie, and Wolfenstein, the next chapter of the famed franchise, Raven Software is slightly reducing its workforce to better reflect the studio's upcoming slate," the Activision statement read.

But our sources tell us that the layoffs were the aftermath of an over-budget and under-performing Wolfenstein and the delay of upcoming time-shifting shooter Singluarity.

The delay for Singularity, which was pushed back from a holiday release to sometime next year, forced Raven Software to move members on the Wolverine team to the project to help reduce the delay, we are told.

The shift in personnel, increased expenses and lackluster sales led Raven to drop from a three game team studio to a two game studio, our sources say.

It's been a bumpy ride for Atomic. In May they had a high-profile title in development and a publishing agreement with Konami. Unfortunately the backlash caused by the sensitive subject matter of Six Days in Fallujah, a title that would replicate a real-world battle only a few years in the past, caused Konami to pull its support. Development on the project continues, but without major funding, cuts had to be made.

Due to a mixture of fears about the edgy subject matter of Six Days in Fallujah, as well as low videogame sales this summer, we have been unable to secure full-scale funding from a major publisher for Six Days in Fallujah. This has caused us to reduce the size of our studio today.

In the words of Marine officer Chesty Puller, "We're surrounded. That simplifies the problem." Development at Atomic will continue with a smaller team that will be funded by our sister company, Destineer.

Atomic Games employed 75 people up until this week. Their official announcement does not mention specifically how many were let go, but we suspect the number to be rather substantial.

We're contacting the company to see if any further information is available.

Update: We contacted Atomic Games directly, but the company was not prepared to share details on the extent of the layoffs, the number of employees affected, or how the layoffs will factor in to the ultimate fate of Six Days in Fallujah. We were told that more information will be released at a later date.