Computerworld.dk's reporting that's IO's dropped 35 staff.
"We are sorry to have to say goodbye to employees, but it is a natural process when working in a project[-based] organization," Niels Jorgensen, general manager at the studio.
It's unknown how many people were let go. The redundancies were made last Thursday.
The studio's currently working on Kane & Lynch 2: Dog Days. Prior to the layoffs, IO's headcount stood at 200 employees.
IO Interactive was founded in 1998 and acquired by Eidos in 2004.
Square Enix acquired Eidos in 2009.