Sony Online Entertainment has confirmed reports of staff cuts across three studios and the cancellation of PS3 and PC MMO The Agency.
The company told PC Gamer it's closing its Denver, Seattle and Tucson studios, and that 205 employees are being let go. Remaining employees at those studios will be transferred to San Diego to work on Planetside Next and an upcoming Everquest game.
The firm also said that The Agency has been cancelled. The MMO was last said to be set for release in late 2011.
SOE said in a statement: "As part of a strategic decision to reduce costs and streamline its global workforce, SOE announced today that it will eliminate 205 positions and close its Denver, Seattle and Tucson studios.
"As part of this restructuring, SOE is discontinuing production of The Agency so it can focus development resources on delivering two new MMOs based on its renowned PlanetSide and EverQuest properties, while also maintaining its current portfolio of online games. All possible steps are being taken to ensure team members affected by the transition are treated with appropriate concern.
"This strategic decision will have no impact on SOE's current portfolio of live games; additionally SOE will transition development efforts for the Denver and Tucson studios' suite of products to its San Diego headquarters.
"This strategic alignment of development resources better positions SOE to remain a global leader in online gaming and deliver on its promise of creating entertaining games for players of all ages, and servicing the 20 million players that visited SOE servers in just the past year."