Gas Powered Games has made a significant number of lay-offs at the studio, but studio head Chris Taylor has told Gamasutra the company is still operational.
According to reports handed to Kotaku (thanks, Splatterhouse), all employees at the Redmond, Washington studio have been let-go except for CEO Chris Taylor and "one or two people."
Taylor told Gamasutra that while the "studio is still operating, but we had to slim WAY down to conserve cash reserves." Taylor told the site earlier in the week it was "betting the company" on its Wildman Kickstarter as it had little cash left in its coffers to continue operations.
Comments made by Taylor to Kotaku indicate employees were aware of the possibility of lay-offs due to the financial issues at the firm, because Taylor runs "a very open company and everyone knows what's going on."
Taylor told Joystiq 40 employees were affected, and while the timing was a bit odd - what with just launching a Kickstarter - it would allow Gas Powered Games to pay severance and remaining paid time-off to all affected.
Taylor also released a video on Kickstarter explaining matters further. In it, he asks backers whether the Kickstarter campaign should continue to see if "the numbers improve", which could allow him to hire employees back if they were still available.
"Or do I shut the campaign down tonight, or tomorrow, and call it done? Do we kill the campaign, or do we keep it going? It's up to you," he said.
Currently the Wildman Kickstarter has 4,070 backers who have pledged $215,152 toward the project's $1,100,000 goal. There are 27 days left on the counter.