Kingdoms of Amalur’s 38 Studios and Big Huge Games suffer massive layoffs following $75 million state loan default

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38 Studios Logo Confirmation reports doing the rounds today indicate that all employees of 38 Studios and developer Big Huge Games have been let go following a chaotic series of events and an expensive period of development.

While the Kingdoms of Amalur: Reckoning developer hasn’t yet sent out a formal announcement, and the studios haven’t been closed outright, employees of both 38 and Big Huge have taken to Twitter, Facebook and other social media outlets to tell everybody about their recent departures from the studios.

Between the two companies, there were 379 full-time employees, while 288 of these were located in Rhode Island – the US state to which 38 Studios moved in order to receive a whopping $75 million state loan.

Following the development and release of the EA-published Kingdoms of Amalur: Reckoning action RPG, holding company 38 Studios had difficulty paying back instalments of that loan, the most recent of which was for over $1 million. Instead of going towards staff paychecks, however, 38 Studios chose to attempt to chip away at the indomitable loan.

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According to 38 Studios and owner Curt Schilling (a former baseball all-star player), Kingdoms of Amalur: Reckoning sold just over 1.2 million copies following launch in February – a number that exceeded EA’s projections, apparently.

It was more recently made known that the game would have needed to sell closer to three million units in order to break even, let alone make a profit, which contributed to the studio’s financial difficulties. Making matters worse, a massively multiplayer online RPG was in the works (set in the Kingdoms of Amalur universe) which was due out this year.

Codenamed ‘Project Copernicus,’ the MMORPG had been the focus of 38 Studios’ work in Rhode Island. In order to continue work on the game, and to take advantage of the promised $75 million state-backed loan, the company moved its operation and employees to the tiny US state. Now, two years later, the loan has been defaulted upon and the debt will now fall to state taxpayers.

Employees of 38 Studios and Big Huge Games were informed of their termination with a letter sent out to the companies:

“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.”

Our thoughts go out to all employees of 38 Studios and Big Huge Games.

As soon as the news broke, other development studios and publishers around the US were quick to let everyone know that there are many positions open to those affected by the layoffs, so there’s at least a tiny ray of sunshine available for them.

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