Krome Studios, Australia's largest developer, has announced it is to lay off staff members in a bid to cut costs in the face of declining game sales.
The studio is one of the largest independents in the world, employing more than 400 staff across three locations in Brisbane, Adelaide and Melbourne.
CEO Robert Walsh said an undisclosed number of employees would be let go as the company positioned itself for the future.
"Regrettably, an undisclosed number of employees across each of Krome's three studio locations were informed they would be let go," Walsh said in a statement to Gamespot.
"With declining game sales, the industry is really feeling the effects of the struggling economy. In spite of industry-wide cutbacks and Krome's need to reduce costs, we've worked really hard to minimise the impact on our staff.
"These cuts, while incredibly difficult as they affect the coworkers we consider friends, are necessary as we position Krome for the future. We're also actively pursuing several business opportunities which, if secured, will enable Krome to reemploy some of the staff given notice."
Krome was founded in 1999 and has since worked with a number of publishers on titles such as Star Wars: The Force Unleashed, Viva Pinata: Party Animals and the Ty the Tasmanian Tiger series.
The news comes after fellow Australian studio Transmission Games announced last month that it too was laying off staff members totalling 20 shortly after its chart-topping release of Ashes Cricket 2009.