The development team at Seven45 Studios were hit with lay-offs last week, as it shipped its latest title, Power Gig.
The developer did not clarify the number of staff affected, but blamed both the cycle of game development and a refocus on future projects for the shake up.
Power Gig: Rise of the SixString is a Rock Band and Guitar Hero rival which uses a custom made real guitar - and sells for around $250.
"With Power Gig already on store shelves, last week Seven45 Studios restructured the company both as a part of the natural cycle of game development and to focus on the development needs of its upcoming games projects," a company spokesperson told GamesIndustry.biz.
"The studio thanks everyone who contributed to our first game Power Gig: Rise of the SixString and we wish the individuals impacted by the re-organisation all the best."
The development studio is an offshoot of instrument manufacturer First Act. The company had secured contracts with Eric Clapton and Kid Rock to promote the game.