Saber Interactive subsidiary New World Interactive has experienced layoffs, affected by Embracer's ongoing restructuring program.
As reported by Insider Gaming, it was first believed that the entire studio had been shut down. Saber Interactive has since described this as a restructure.
GamesIndustry.biz has reached out for further clarification.
"This reorganisation has unfortunately resulted in layoffs at the studio," the company said. "We are working to fill existing open roles within Saber with individuals affected by these changes wherever feasible and we will be providing severance packages to those employees impacted."
Saber Interactive added that development on Insurgency: Sandstorm and future unannounced projects would continue.
It's unclear how many workers have been laid off at the studio, though a public post on LinkedIn shared by Second Wind's Nick Calandra suggested that "most of the team" on a cancelled project had been affected.
The news comes after Embracer recently shut down TimeSplitters developer Free Radical Design and downsized Fishlabs by 50 roles.
In its latest financial results, Embracer revealed that it had let go over 900 people in three months, which interim chief strategy officer and CEO Phil Rogers told GamesIndustry.biz was an "agonising process" but "necessary."
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