It's not just the South of Midnight team at Compulsion Games that's facing closure. New reports from Bloomberg suggest that Ninja Theory, Double Fine, and Arkane are also at risk of suffering the same fate. This is despite the fact that some of them have just announced new game projects.
Rumours of cutbacks within the Xbox division have been circulating over the past week, with reports also suggesting that the division is being considered for a spin-off as a separate company, similar to GitHub. Several sources also claim that the upcoming cost-cutting measures and changes are massive and that no one is safe.
Neither Microsoft nor any of the teams mentioned have commented on the reports.