Activision has closed its Budcat Creations studio and confirmed that it is laying off staff in its Californian QA team.
The move comes as it reassesses racing studio Bizarre Creations, with the possibility of closure, sale or downsizing at the Liverpool outfit.
"We continue to streamline our music development resources to ensure that they are aligned against our slate and strategic goals," the publisher said in a statement to Gamasutra.
"As a result, we are implementing a targeted reduction in jobs in our quality assurance team in California and closing our Budcat studio in Iowa. Budcat has been a great partner to Activision and has created a lasting impact on the Guitar Hero franchise.
"Approximately 88 positions, or approximately 1 per cent of our global workforce, will be impacted by these reductions. We are working to redirect those employees that are impacted to other parts of the company where possible, as well as offering them outplacement counselling services."
Activision acquired Budcat two years ago to work on its music franchises, and it has released PlayStation 2 and Wii versions of Guitar Hero and Band Hero games.