38 Studios fails to pay staff, reportedly issues lay-offs

In its efforts to meet loan repayments owed to the state of Rhode Island, Kingdoms of Amalur: Reckoning developer 38 Studios has skipped payroll, and may have let a number of staff go entirely.

WPRI, which has been following the taxpayer funded local scandal closely, reports 38 Studios hand delivered a cheque for the $1.25 million loan repayment it defaulted on earlier this week, triggering an investigation by the state's Economic Development Corporation.

Unfortunately, despite failing to issue payroll this week, the cheque bounced, as the developer doesn't actually have the cash.

38 Studios and its staff are refusing to comment on the situation, but according to Joystiq's sources, the developer has let go all temporary and contract staff. At its last financial report, the developer has employed 379 full-time staff, 34 full-time contractors and eight interns.

As spotted by Polygon, founder Curt Schilling's profile was temporarily removed from the developer's "Visionaries" page, but is back in place now.

Kingdoms of Amalur: Reckoning was published by EA Partners and is 38 Studios' only release to date. The developer is working on an MMO in the same setting, code named Copernicus.

Thanks, GiantBomb.