Up to 30 staff have been laid off at Obsidian Entertainment, according to reports.
Sources have told Joystiq that the cuts follow the cancellation of a next-gen title, dubbed Project North Carolina. Layoffs have also hit the team working on the South Park RPG that was announced in December.
One source said: "Another project cancelled, this time for a future next-gen project and the layoffs impacted that team, plus the existing South Park team.
"Approximately 20-30 people from all disciplines [are affected], including one person who started yesterday, as well as one who started last week."