Sony has closed down UK-based developer Bigbig as part of a 'restructuring' effort.
The firm has also downsized its Cambridge division, putting employees that remain to work with Guerilla Games on Killzone titles for Vita.
It's unclear how many redundancies have occurred as a result of the changes.
"It was felt that by focusing on other Studios that are currently working on exciting new projects, we would be in a stronger position to offer the best possible content for our consumers," Sony told Develop, confirming its actions.
"We have reviewed and assessed all current projects and plans for the short and medium term and have decided to make some changes to European studios. As a result of this, there will be a realignment of resource within the studio to ensure that the studio is in the best position to achieve this," it added.
Bigbig recently wrapped up work on Vita launch game, Little Deviants, which will sit on shelves alongside Vita on February 22.