Swedish developer Avalanche Studios is preparing to lay off 77 employees--nearly half of its 160-person workforce--after losing two contracts for unannounced games, GameReactor and Swedish outlet FZ report.
"We have given notice that it's our intention to lay off 77 people," Avalanche CEO Christofer Sundberg confirmed with GamesIndustry. "I'm very positive that we'll get back on our feet again. But will we become a 160 employee studio again? I'm not sure."
The two cancelled projects were valued at $34 million, with one cancellation reportedly stemming from a lack of funding while the other was a result of a new family-friendly focus for the unnamed publisher. The global credit crisis played a factor as well.
Though every team will lose some members, Avalanche's two announced projects, the open-world shooter Just Cause 2 (PC, PS3, 360) and free-to-play PC effort The Hunter, are still under development. According to Gamasutra, Just Cause 2, once expected this fall, has now been delayed until next spring, while The Hunter is in open beta.