Update: Kotaku reports that, prior to today's layoffs, the "bulk" of the staff at Crytek USA had quit (some more than a week ago) as a result of not being paid. With so much of the studio gone, Crytek had no choice but to move development of Hunt to Frankfurt.

Original Story: Following the announcement that Deep Silver has purchased the Homefront IP from Crytek and will establish a new studio to continue work on Homefront: The Revolution, Crytek has explained what's happening on its end.

Most notably, as suspected, the Crytek UK employees who had been working on The Revolution will move to the newly founded Deep Silver Dambuster Studios which, like Crytek UK, is based out of Nottingham, England. This is according to a statement issued by Crytek, which doesn't indicate whether this means Crytek UK--formerly Free Radical Design--has been shut down. We've followed up with Crytek for clarification about whether this leaves any staff still at Crytek UK, which not long ago had talked about the prospect of making a new TimeSplitters, the series for which it is best known.

As part of Crytek's "internal restructuring," staff at its Austin, Texas location (Crytek USA) will be laid off, although "several" employees will remain behind to assist with CryEngine support for North American developers who have licensed the game-development engine. The game that the studio had been developing, Hunt: Horrors of the Gilded Age, will now be handled by Crytek's Frankfurt studio, developer of the Crysis series and Ryse: Son of Rome.

Several of Crytek's studios--including Budapest, Istanbul, Kiev, and Sofia--will "continue to operate as usual," while a "closer collaboration between Crytek's studios in Shanghai and Seoul is under review."

"As we look to cement Crytek's future, this strategic deal with [Deep Silver parent company] Koch Media would allow us to continue with our ambitious goals to become an online publisher," Crytek CEO Cevat Yerli said in a statement. "With Warface, Arena of Fate, and Hunt, we believe we have the perfect portfolio and teams to make that happen. We would like to thank all our staff--past and present--in both Nottingham and Austin for their contributions to the company, and we wish all the very best to anyone who may no longer be under the Crytek banner moving forward."

Reports have circulated for months that Crytek was in trouble, with staff at Crytek UK not being paid for extended periods of time. This resulted in a number of staff leaving the studio. Crytek denied anything was wrong until last week, when it described itself as being in a "transitional phase." It also said it had secured capital to ensure the company's future, presumably in reference to today's Homefront announcement.