Whispers say a number of staff at 2K Marin's Canberra studio have suddenly found themselves unemployed.
Kotaku was tipped off to the layoffs by an anonymous source, who claimed 15 staff had been let go.
2K is yet to issue comment.
2K Marin is the joint American and Australian development team behind BioShock 2 and the upcoming XCOM.
If the rumours prove true, 2K Marin will join a number of localstudios affected by a sudden wave of downsizing and closures, which has brought about the end of Visceral Melbourne, Team Bondi, Blue Tongue and THQ Australia.