Amid all the controversy that 38 Studios has been going through paying back their loan to the state of Rhode Island, it has been revealed that 38 Studios has now laid off all of its employees and Big Huge Games has closed its doors.

According to, they have confirmed from several sources that 38 Studios has informed employees of the layoffs this afternoon.

Employees have received this email today according to WPRI:

"The Company is experiencing an economic downturn. To avoid further losses and possibility of retrenchment, the Company has decided that a companywide lay off is absolutely necessary.

These layoffs are non-voluntary and non-disciplinary.

This is your official notice of lay off, effective today, Thursday, May 24th, 2012."

This news comes after it was revealed that 38 Studios failed to make a $1.125 million payment on a $75 million taxpayer-backed loan. The loan was granted to 38 Studios in 2010 under the condition that the studio would relocate from Massachusetts to Rhode Island.

Earlier this month reported that 38 Studios had finally been able to make the payment, but was unable to make payroll for its employees. It was later revealed that the check that 38 Studios gave to the state had bounced.