Disney Interactive Studios is the latest videogame company to resort to layoffs amidst a deteriorating economy, a Thursday report claimed.

Games blog Kotaku cites unnamed sources that say DIS subsidiary Propaganda Games, the Vancouver-based Turok developer, is poised to lay off 70 workers as a result of the cancellation of the unannounced Turok 2.

The report also claims that DIS is set to consolidate some of its internal studios.

An allegedly leaked internal memo to DIS employees from Walt Disney Internet Group head Steve Wadsworth said, "The elimination of existing positions that we communicated today was a necessary step that we had hoped to avoid." He cited that tough economic conditions also led to cost control measures such as "freezing most open positions, deferring some capital projects, reducing support from third parties, taking significant reductions in travel and entertainment expenses and eliminating other activities."

Calls in to Propaganda Games and DIS were not returned as of press time.

[UPDATE] Kotaku now reports that reps have confirmed layoffs, although Propaganda's cuts are limited to 35 or less, not the 70 as originally reported. Consolidations will take place between internal studios Avalanche and Fall Line, which will supposedly help increase focus on Wii development. A rep didn't confirm the alleged cancellation of the unannounced Turok sequel, although the company still holds the rights to the series.