Massive Job Cuts at LucasArts Confirmed, Rumors of Knights of the Old Republic MMO (Updated)

Update: A LucasArts spokeswoman has confirmed the reports of layoffs, noting that the workforce reduction is not indicative of troubled times at the company.

"I can confirm we had layoffs yesterday they were in the studio," LucasArts public relations director Margaret Grohne told Kotaku. "They had to do with where we are in our product life cycles."

"We are healthy," she added. "We have a good slate of games and we have some good stuff going on in production. We are definitely committed to the internal studio."

Original Story: While LucasArts has yet to officially comment on the matter, rumors are circulating that the developer has laid off a significant number of its employees.

According to Kotaku, up to 100 staffers are rumored to have been laid off, including LEGO Star Wars and Indiana Jones producer Shawn Storc, product development VP Peter Hirschmann and many from the quality assurance, art, programming, and development departments.

A separate tipster, said to be an ex-employee, today claimed the rumored Star Wars: Knights of the Old Republic MMO, Star Wars: Battlefront 3, a Wii lightsaber game, and another LEGO Indiana Jones are all in the works, though no developers were specified.

While LucasArts has been making an effort to do more in-house development since 2004, Force Unleashed lead Haden Blackman admitted earlier this year that "unchecked ambitions at the outset...did become really problematic for us."

The company has been successful in working with other studios, such as TT Games (LEGO Star Wars, LEGO Indiana Jones), Day 1 (Fracture), Krome and n-Space, but is developing at least two titles internally--SW: The Force Unleashed and Indiana Jones.

Other past notable LucasArts development partners include BioWare (Star Wars: Knights of the Old Republic), Pandemic (Star Wars: Battlefront) and Totally Games (X-Wing, TIE Fighter).

The rumors suggest some positions will be filled by outsourced workers overseas.

"Some that believe that more money can be made by licensing the SW and Indiana Jones IP to third party developers," an anonymous source wrote earlier this year after LucasArts president Jim Ward resigned "for personal reasons."

The first of LucasArts' internally-developed current-gen efforts, The Force Unleashed, is set to hit on September 16. While the 360 and PS3 editions were developed in-house, Krome Studios handled the PS2, Wii and PSP versions while n-Space tackled the DS release. The rumored departures are said to not affect the project.