When it rains in Rhode Island, it pours in Rhode Island. We don't mean to be glib – you've probably already seen the news that game developer 38 Studios, of Kingdoms of Amalur: Reckoning fame, laid off its entire workforce of nearly 400 employees this past Thursday.
The surprise move came via an email from management that day, which informed all employees that the "non-voluntary" and "non-disciplinary" layoffs were necessary, "to avoid further losses and possibility of retrenchment."
But if losing one's job out of the blue isn't one of the absolute worst feelings to experience, the story allegedly gets a bit worse. According to Polygon's Brian Crecente, some of the employees that took advantage of 38 Studios' relocation program when the company moved from Massachusetts to Rhode Island might now be on the hook for a second mortgage: Their original homes were never sold.
None who spoke to Crecente apparently agreed to be quoted in print, but one of 38 Studios' 288 Rhode Island employees was allegedly called by his or her bank this week and asked why the mortgage on the employee's original home hadn't been paid. Other sources confirmed the mortgage issues with Crecente, and an unnamed representative for 38 Studios said that the company, "is working to try and get to the bottom of the notifications and find a resolution," Crecente reported.
Employees were first given a partial clue that all might not be right with 38 Studios when the company allegedly kept the communication channels pretty clear over the month prior to the big layoffs. Additionally, employees had allegedly not received paychecks since April 30 – a situation they only learned about on May 15, once checks weren't automatically deposited to accounts.
Sounds pretty bad, eh? It's not over yet. An anonymous source and former 38 studios member, in an email to Kotaku's Evan Narcisse, said that one employee learned her medical insurance was scheduled to terminate on the 24th. She didn't learn that from the company, however; the pregnant employee was told by her doctor during an appointment all of two days prior to the layoffs.
The strange financial happenings at 38 Studios kicked off this month when the company was having a bit of trouble making a $1.125 million loan payment to Rhode Island on the May 1. The state guaranteed 38 Studios' a $75 million loan to move its business from Massachusetts in 2010.
38 Studios released all of one game during its existence; its second, an undisclosed MMO known only as "Project Copernicus," had a rumored launch date of July 2013. However, critics of 38 Studios – popping up in light of the company's woes – claim that the studio just didn't have the kind of money it takes to realistically make a full-fledged, chart-topping MMO title.
"$75 million dollars is a ton of money to have to make a game, but in terms of making an MMO, it is like trying to down an African bull elephant by throwing copies of uDraw at it. It isn't going to happen—ever," said Kevin Dent in an column posted to Kotaku.
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