Citing an anonymous tip-off, the Kotaku report pointed to the Facebook page of Vancouver innovation initiative Can We Do It? which reported: "We've just gotten word that the entire studio at Microsoft Games Studios on 840 Cambie has been laid off. 35 people in total. This is nuts. We'll update with more when we can."
In May last year, it was reported that the Microsoft Vancouver studio was involved in developing a big-budget AAA shooter for the Kinect.
The studio's website is still operational, listing several job openings. The site's opening blurb reads: "MGS Vancouver is building a world-class development team in Vancouver, BC, Canada, dedicated to making games for 'core' gamers."
[UPDATE] A Microsoft spokesperson told GameSpot the publisher is not shutting down the Vancouver studio completely, but will be stopping development on two projects. According to the spokesperson, the team affected by this move is "small." The full statement reads:
"Microsoft Studios has decided to end development on Microsoft Flight and Project Columbia. As a result of this action, some positions within the development teams have been eliminated. Microsoft human resources is working with the affected individuals to find new roles within the company."
"Microsoft Studios is invested in British Columbia and still has several teams, both in Vancouver and Victoria, which will continue to produce the best entertainment and gaming experiences possible."