Developers at Ignition's London studio were given their 30 days notice on Friday, GamesIndustry.biz understands.
The game the team were working on, Project Kane (formerly known as War Devil) has been cancelled for the second time, although could be picked up by another developer.
According to Develop, Ignition's studio in Japan will probably shut down once it has completed work on its latest game.
"In order to facilitate shifting the publishing focus to more effectively work with innovative independent developers and explore new platform possibilities, Ignition Games has taken the strategic decision not to continue with internal development of games," said an official statement from the company.
Last week Ignition laid off its entire Austin console team, who had been working on new FPS Reich.
Ignition has not returned requests from GamesIndustry.biz for further clarification.