Developers behind Just Cause 3 and Mad Max have been sacked following completion of the games.
Avalanche Studios has laid off around 24 staff just before the launch of Just Cause 3 in December.
The company has also completed Mad Max this year for Warner Bros.
“The transition between major projects is always challenging, especially for independent developers,” a rep told GameInformer.
“We have just completed one project and are currently wrapping up another. In starting up our new projects, we were not able to perfectly match the team sizes and skill sets of the previous ones, and we unfortunately had to let some talented developers go.
“Twelve developers were given notice in New York. There was a similar number of notices given this summer in Stockholm, but right now we are in the process of rehiring some of those who left. We expect to keep hiring in the new year. This unfortunate event does not affect any of our current projects, and we’re taking measures to avoid situations like this in the future.”