UPDATE, November 24: An unnamed Red5 spokesperson has confirmed to GamesIndustry.biz that layoffs have occurred to the studio, though declined to discuss the number of staff let go.  

The statement reads, in part: "The organization optimization was due to our strategy modification, which includes empowering the support to the operation in various global markets and the upcoming PS4 project. Doing so requires specific skill sets and experiences. Red 5 will continue its commitment to developing AAA games and bringing the best game experience to its audiences."

Original story follows.

MMORPG.com reports that significant layoffs have hit the Southern California-based studio Red5, developer of the MMO shooter Firefall. The game had long been in development and released last year in the West.

According to a Reddit post on the Firefall subreddit, 40 staffers lost their jobs; MMORPG.com's source, reportedly a Red5 developer directly affected by the layoffs, pegged the number as between 20 and 25 percent of the studio's workforce.

The news comes in the wake of the game's poor Chinese launch, the source says. Chinese publisher The9 acquired Red5 in 2010, five years after the studio's founding. Following a troubled development cycle, Red5 co-founder and CEO Mark Kern was ousted from the studio in 2013.

Development on the game appears to still be active.

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