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Kingdoms of Amalur dev fails to pay staff, makes layoffs

38 Studios also unable to cover overdue loan payment of $1.125 million

Kingdoms of Amalur: Reckoning developer 38 Studios' financial problems worsened this week as the company failed to make payroll.

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It didn't pay employees on Thursday, while the Rhode Island Economic Development Corporation returned a hand-delivered cheque of $1.125 million meant to cover an overdue loan payment because 38 Studios had insufficient funds to cover it, WPRI reports.

The studio also laid off all temps and contractors this week, according to Joystiq.

Rhode Island state officials offered 38 Studios $75-million to relocate from Massachusetts in 2010 in a move designed to create new jobs and tax revenue.

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