Around 30 staff have been laid off at Red 5 Studios, the development team formed in 2005 by former Blizzard staff.
That's according to a report by Gamasutra, although nothing official has been announced by the studio. Red 5 is thought to employ in the region of 100 members of staff.
In late 2006 the company secured $18.5 million in investment from Benchmark Capital, used for the creation of a new massively multiplayer online game, to be published by Korean partner Webzen.
The company has offices in California and Shanghai. GamesIndustry.biz has contacted Red 5 Studios for clarification.