Midway's studios in Newcastle and San Diego face closure by the end of June unless they are bought or can secure investment.
The two studios were not included in Warner Bros. USD 33 million offer for troubled Midway last month, and as a result face an uncertain future.
"The heartbreaking thing for me is having people come to me and tell me they are talking to another company about a job because of the situation, but they don't want to leave the studio, and if the studio goes forward they will stay," said Newcastle studio head Craig Duncan, speaking to The Guardian.
"I think given the severity of the situation all you can be is honest with the staff about what is happening to the company. You have let them know how the situation is likely to play out, how it affects them and what we are trying to do as a management team to help. Good leadership is crucial in difficult times," he added.
Midway Newcastle's most recent release was the poorly received Vin Diesel project Wheelman, but despite the looming closure, the team is still at work on a new title.