Rumour - Obsidian hit with lay-offs, "North Carolina" shelved

Obsidian is reportedly being hit with a round of lay-offs due to the cancellation of a "future next-gen project" and more lay-offs on the "existing South Park team" according to Joystiq.

Various LinkedIn profiles also note employees mentioning previous experience at the developer, two of which posted on the Obsidian forums state they were recently working on the South Park title.

A Joystiq tip states approximately 20-30 people "from all disciplines, including one person who started yesterday, as well as one who started last week" were affected. The same tip was provided to GameBanshee last night.

Kotaku's sources claim the cancelled project was codenamed North Carolina, and was to release for the next Xbox. Microsoft is said to have shelved the project, with Obsidian CEO Feargus Urquhart choking up while breaking the news to staff.

It's not clear whether North Carolina has any relation to Obisidan's rumoured Wheel of Time game, which was believed to be codenamed Virginia.

We're waiting on confirmation of these reports. If the layoffs are genuine, it's worth noting that the firm announced a round of lay-offs in April last year, so this may be an annual reformatting of the business or something else entirely.