All staff at 38 Studios and Big Huge Games let go
Financial problems cause huge debt to state, most staff is let go
38 Studios and Big Huge Games have both let go of all staff, Joystiq reports.
The recent financial tumult arose following a defaulted payment from 38 Studios to the Rhode Island state government on May 1, indicating much larger financial issues that could ultimately lead to Rhode Island taxpayers owing up to $112.6 million between 2013 and 2020. It's unclear whether today's layoffs mean 38 Studios is unable to pay back the approximately $50 million its owes Rhode Island of a planed $75 million loan. If that's the case, Rhode Island will take over ownership of the Amalur IP, valued at around $20 million.
An internal memo to employees at 38 Studios reads: "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." Big Huge Games and 38 Studios is said to have employed 379 staff as of March 15.
The latest release from the developers is Kingdoms of Amalur: Reckoning, which went on to sell 1.22 million copies after three months of release. According to sources, it needed at least 3 million sales to break even.
Following this sudden news, Twitter saw the hashtag "#38jobs" reach trending status in the US, with industry members providing support and job listings for all the now-jobless staffers.
The recent financial tumult arose following a defaulted payment from 38 Studios to the Rhode Island state government on May 1, indicating much larger financial issues that could ultimately lead to Rhode Island taxpayers owing up to $112.6 million between 2013 and 2020. It's unclear whether today's layoffs mean 38 Studios is unable to pay back the approximately $50 million its owes Rhode Island of a planed $75 million loan. If that's the case, Rhode Island will take over ownership of the Amalur IP, valued at around $20 million.
An internal memo to employees at 38 Studios reads: "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." Big Huge Games and 38 Studios is said to have employed 379 staff as of March 15.
The latest release from the developers is Kingdoms of Amalur: Reckoning, which went on to sell 1.22 million copies after three months of release. According to sources, it needed at least 3 million sales to break even.
Following this sudden news, Twitter saw the hashtag "#38jobs" reach trending status in the US, with industry members providing support and job listings for all the now-jobless staffers.
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