Layoffs have hit Aliens: Colonial Marines developer TimeGate Studios.
In a statement issued to Polygon, TimeGate president Adel Chaveleh said the layoffs were part of a studio "reinvention".
"Today, we had to make the difficult decision to let go of some great game developers," he said. "This is never easy, and we're doing all we can to assist those developers affected.
"TimeGate is preparing, as is the entire industry, for the transition to next-generation consoles and new business models. As part of this reinvention, all projects and strategic initiatives continue to move forward at the studio."
Sources told Polygon around 25 people were let go after a publishing deal fell through.
Last month TimeGate was embroiled in the controversy surrounding Aliens: Colonial Marines, which launched to poor review scores.
According to reports, TimeGate created as much of the ill-fated shooter for publisher Sega as headline developer Gearbox, which has been widely criticised for the way it managed the six-year project.
Prior to its work on Aliens, TimeGate created online shooter Section 8 and expansions for FEAR.