It's a very sad day in the gaming industry, as 38 Studios has laid off its entire workforce -- including Baltimore-based studio Big Huge Games -- due to the financial turmoil the company has been in. That's 379 people suddenly without a job. Employees were notified of the layoffs with this cold internal memo obtained by WPRI:
The Company is experiencing an economic downturn. To avoid further losses and possibility of retrenchment, the Company has decided that a companywide lay off is absolutely necessary.
These layoffs are non-voluntary and non-disciplinary.
This is your official notice of lay off, effective today, Thursday, May 24th, 2012.
The issue first started when 38 Studios missed its loan payment of $1.125 million owed to the Rhode Island government earlier this month. That's just the tip of the iceberg: a studio closure would result in Rhode Island taxpayers owing up to $122.6 million between 2013 and 2020, including interest, on a loan of $75 million, as reported by Joystiq.
Rhode Island Governor Lincoln Chafee held a press conference earlier today in which he said experts told him that Kingdoms of Amalur: Reckoning, 38 Studios' first game, needed to sell "in the 3 million range" in order to break even. According to studio founder Curt Schilling, Reckoning sold 1.2 million copies in its first three months of release. To Chafee and Rhode Island, that means "the game failed."
Governor Chafee's office had been in contact with Schilling yesterday, and others at 38 as recently as today, yet had no idea that the studio had laid off its entire staff shortly before the press conference. He heard the news during the press conference when journalists raised questions about the layoffs. 38 itself has still released no official comment; it is unclear if the company is planning to declare bankruptcy. If it does go under, ownership of all of 38 Studios' IP would transfer to Rhode Island's taxpayers.
This story is developing, and we'll update as we learn more of the situation. A grassroots effort has formed on Twitter in an attempt to help former employees of 38 Studios find new work at a variety of game companies with open positions, via the #38jobs hashtag. We wish them the best of luck in finding jobs.
38 Studios lays off its entire staff [WPRI]