[Update: Valve head Gabe Newell offered the following statement to Engadget: "We don't usually talk about personnel matters for a number of reasons. There seems to be an unusual amount of speculation about some recent changes here, so I thought I'd take the unusual step of addressing them. No, we aren't canceling any projects. No, we aren't changing any priorities or projects we've been discussing. No, this isn't about Steam or Linux or hardware or [insert game name here]. We're not going to discuss why anyone in particular is or isn't working here."]
Last night, word got out that Jeri Ellsworth had been fired from Valve. While I didn't think too much of it at the time, she was a part of the company's hardware R&D division and, as we learned today, she was not alone in being let go. What's going on at Valve?
Gamasutra is reporting that "several employees" have been laid off, including folks who were on hardware and Android development at Valve, with employees describing the situation as a "great cleansing." While unconfirmed, the number "25" has been brought up.
Considering the profitability of the company, it would seem that this has more to do with the direction Valve is heading in than anything else. Gamasutra suspects the cuts were due to company challenges as opposed to individual employee performance, which makes a lot of sense as new initiatives are underway.