Fuel Games, developer of iPhone, PC, online, and console games, told Gamasutra that it is cutting staff and is in the midst of restructuring -- right after a venture capital injection.
The developer, which has studios in Ottawa, Canada, and Denver, Colorado, made games such as Vans SK8
for iPhone, web-based titles such as the Entourage-based Viking Quest
, and the McDonalds Happy Meal-bundled Fairies And Dragons
, and runs online portal AllGirlArcade.com
The company also created numerous advergames for brands such as the Niagara Motel film, Milwaukee's Best Light, and the Land of the Dead movie, among many others.
"Last Thursday about 20 people were laid off from the Ottawa office (out of around 100 people), and reportedly the entire staff was told they would not be receiving their paychecks on Friday," said an ex-Fuel Games employee who wished to remain anonymous.
He added, "On Friday, the Denver studio was told it was 'winding down,' and just over half of the studio was let go immediately. The remainder were told they'd be able to stick around to finish out current contracts."
In a phone call with Gamasutra on Tuesday, Fuel Games director of communications Nick Iannitti confirmed that there were layoffs, but said he couldn't immediately confirm our source's numbers.
"There is some truth [to the rumors] in that we recently received some venture capital, and along with that there has been some restructuring," he said.
Iannitti said Fuel Games hired "a lot of people" over the past couple of months, many of which were hired under contracts for specific jobs that no longer fit the company's new structure. "We tried to keep as many people as we could. We're actually going to be bringing back as many people as we can once we get past this bottleneck."
According to Iannitti, the layoffs came after Fuel Games received venture capital funding. He said, "Basically, the funding came with the goals for certain projects that we're working on, such as our virtual world and our gaming portal for girls, All Girl Arcade."
He added, "It really came down to numbers of where the new money was going to be going, and where we needed to tighten up in order to keep the flow going in the right direction."
"It's a period of major growth for us -- which I know sounds confusing, to say 'growth' and 'layoffs' at the same time," he said. "But since the year started, especially in the spring, we grew massively, and a lot of people were brought on board on contract for specific projects which have since finished."