They're "reorganizing its teams" says LucasArts officially, to "better address" needs of their internal studio. Former employee calls it a "massacre".
There have already been high profile casualties from the decisions made by new LucasArts president Paul Meegan, with senior producer Haden Blackman having left following the cancellation of Star Wars: The Force Unleashed III.
Meanwhile the San Francisco studio has gone gold recently with Star Wars: The Force Unleashed II, keeping it on track for its late-October release on Xbox 360, PS3 and PC. A now ex-employee claims 60 devs and 25 QA staff were let go.
"LucasArts is reorganizing its teams to better address the needs of the internal studio. Unfortunately, this means adjusting staffing," reads a statement from the company.
"LucasArts continues to be committed to creating a first-class internal studio – and to fostering relationships with trusted external partners – in order to deliver quality games that amaze and inspire fans." TFUIII's canning doesn't inspire much confidence.