Kotaku has received word from several LucasArts employees that the company is phasing out employees at all levels of production, including QA testers, programmers, artists, and LEGO Indiana Jones and LEGO Star Wars: The Complete Saga producer Shawn Stoc. These positions are expected to be outsourced overseas, with LucasArts to more strongly utilize outside development teams to handle their IPs.

Several of these ex-employees, obviously more than a little miffed over the mass layoffs, have decided to start spilling the beans on several titles LucasArts was rumored to have in development. Among them are Star Wars Battlefront 3, another LEGO Indiana Jones game (which Traveler’s Tales had already said was a possibility), a Wii lightsaber game, and a non-LEGO Indiana Jones game. What’s that? Those titles don’t have you very excited?  Well how about this: word of Knights of the Old Republic III and its companion MMO has also surfaced. Excuse me while I release a cry of unbridled joy.

While some of these games are likely residing in the hands of other developers (BioWare better be working on KotOR 3!) the status of those still being handled by LucasArts might be looking a little worrisome with so much of their workforce cut loose. Thankfully, Star Wars: The Force Unleashed is apparently far enough along in its development cycle (ready to ship, in fact) to not be affected by these mass firings. Day 1 Studios’ Fracture also seems to be unaffected, although several team members referred to it as “an absolute piece of garbage.” Ouch! Of course, it’s entirely probable that statement had more to do with resentment towards their former employer than the game’s actual quality. Although this news is all but confirmed, we'll go ahead and file this as a Rumortoid until we receive some sort of statement from LucasArts.

So what do you think about the change in LucasArts’ development model? Are you as pumped over a more solid KOTOR 3 confirmation as I am?