An estimated 30 employees of 7 Studios have been laid off by owners Activision, according to reports.
The music game studio was acquired by Activision in April this year as it worked on DJ Hero competitor Scratch the Ultimate DJ, an acquisition that resulted in the game's original publisher, Genius Products, pursuing legal action against it.
This legal action culminated in 7 Studios being ordered to return all source code and tools to Genius.
Activision denied buying the studio with the sole intention of delaying the release of a competitor's game and gaining access to its technology, saying at the time the buy out would "bolster its development capabilities."
However, today Kotaku reports around 30 employees of the studio are thought to have been laid off - a number that represents approximately half of the entirely of 7 Studios.
"Since the completion of its acquisition by Activision, 7 Studios has realigned its business to focus its development resources on the music genre. As a part of this realignment, the studio is reducing its workforce to better reflect Activision's upcoming slate of music-based games," said an Activison representative.