Around 30 employees of Austin-based developer Red Fly Studio were made redundant on June 22.
In an interview with Gamespot, CEO Dan Borth lamented the decision, attributing it to a sudden project cancellation.
"The reduction of staff was a response to a large, high-profile project that was, to our surprise, reevaluated and then canceled."
Red Fly debuted in 2008 with Mushroom Men, and went on to develop a series of licensed games for the Nintendo Wii, including Ghostbusters and Star Wars: The Force Unleashed 2.
"Red Fly has been an agile, passionate company from day one, and while this news was very difficult, we've made a concentrated effort to reinvest in ourselves and the way we want to make games," Borth added.
"Currently, we are all very excited about our new opportunities and working diligently to make them a reality."
Red Fly's last game, Thor: God Of Thunder, was released at the end of April, selling 30,000 units [VGChartz] across PlayStation 3 and Xbox 360 to date.