Updated: Layoffs hit Silicon Knights

Updated – 11/2/2011

According to an article in the Financial Times, 45 of Silicon Knights’ 72 employees were laid off (less than the earlier reported figure, noted below), leaving “just under 40″ with the company. According to Silicon Knights CFO Mike Mays, the culprit is a last-minute game cancellation:

“We just finished a project with [Activision Blizzard Inc.] that got completed [...] We had another project lined up that had been in the works for months, which had been green-lit and at the final second, at the high corporate level, the project got canceled. We don’t know why. Probably something to do with the publisher on their side, but that resulted in us having too many people so we had to do a layoff.”

Mays also notes that the company is in the process of contract negotiation for new projects, and that they hope to rehire as many people as possible once those projects are in place.

“Sho hopefully this layoff will be short term,” he said.

Original Story:

First reported earlier today by 1UP, “sources close to the company” have said that Canadian developer Silicon Knights has laid off over 70 employees, leaving a staff of 25 at the studio. Back in July, the developer received $3 million in funding from the Canadian government, intended, it was said, to preserve the company’s current jobs and to create 80 more.

As of now, the company has not responded to any site’s enquiries about the lay off rumors, though it’s probable that the truth will come out one way or the other in the next few days.

Apparently, rumors started to swirl about the coming cuts as early as July, when a “whistleblower” started to contact 1UP reporter Andrew McMillen about staffers’ names being left off of the credits to last month’s Silicon Knights-developed X-Men: Destiny. And on October 26, McMillen got an anonymous tip from a source, instructing him to keep a close eye on LinkedIn, where former employees of the studio would soon be posting resumés.

While the story of layoffs or studio closures is always bad news, this one doesn’t leave me too terribly surprised. I’d heard that their game from a few years ago, Too Human, was all hype, and having played and reviewed X-Men: Destiny, I didn’t see that the studio was really coming up with the hits that would justify a return on any government investments.

We’ll see what the deal is soon, I suppose.

Via 1UP