As a part of “cost-reduction measures,” Midway is planning to lay off 25% of its staff nationwide, with the Austin studio being completely shut down and development suspended on several games.

Layoffs will hit Midway branches across America, with jobs being cut “across multiple disciplines” in Midway’s Austin, Chicago and San Diego studios. Austin, which had most recently produced BlackSite: Area 51, is the hardest hit by the studio’s scrimping and will be completely shut down. “The cost-reduction measures are vital for us to rationalize our operations and provide the resources necessary for our core properties to succeed,” Matt Booty, president and CEO of Midway, said. “These initiatives, along with the other steps we have taken this year, are a response to the specific challenges we are facing at Midway, many of which have been amplified by the current economic conditions.”

As for the games planned for cancellation, Midway described them as “non-core projects” that were scheduled for release in the next couple years, but which weren’t known to the public anyhow.

Though their studio’s closure is nothing to take lightly, the staff at the Austin studio has a history of frustration with how things are run at Midway, Shacknews notes. Criticizing Midway’s rush to get BlackSite: Area 51 on store shelves, director Harvey Smith called the process “completely reprehensible” saying “[the game] went straight from alpha to final.” Smith, who had previously worked on Ion Storm’s Deus Ex before joining Midway, described the project as “so fucked up.”

Midway has been ailing for some time now, having accumulated $245 million in debt. The company recently saw its stock fall to less that 40 cents a share following the sale of a majority stake in the company for a mere $100,000.

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