"common in the games industry," and shouldn't be taken as them being in trouble.
As Lionhead is now in the process of "beginning work on its next projects," the employee headcount will undoubtedly fluctuate. Reports indicate less than 10% of their payroll is affected.
While this may seem gloomy, Microsoft has pledged that 100 new positions will be created and filled across the UK next year. Staff will be let go likely before 2012's end.
"Following the completion of Fable: The Journey the Lionhead studio is in the process of beginning work on its next projects. As is common in the games industry, a reduced headcount is needed as projects kick-off and ramp up as development gets underway," Lionhead Studios told in a statement.
“At this time a very small number of positions have been identified as at risk of redundancy and the affected employees were notified today. We are working very closely with those people during this difficult time, to help them explore alternative opportunities within Microsoft including new roles at Microsoft Studios which is actively hiring.”
Fable: The Journey released on Xbox 360 supporting Kinect earlier this month.