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THQ is closing or severely reducing staff in several of its internal studios, reports Gamasutra. The hardest hit studios are the ones being closed completely: Paradigm Entertainment, Mass Media, Locomotive Games, and Sandblast Games. Paradigm was acquired from Atari in 2006 and only produced Stuntman: Ignition during its time with THQ. Mass Media was acquired in 2007 and has not had an announced title, but CEO Brian Farrell said the company was interested in its "platform development tools." Locomotive was best known for its recent Destroy All Humans! Big Willy Unleashed!, and Sandblast just completed work on Destroy All Humans: Path of the Furon.

Less extreme cuts are being made to at least two other studios. Juice Games, responsible for the Juiced series, is seeing layoffs of roughly one-third, and Rainbow Studios is also seeing unspecified amounts of layoffs. Finally Helixe, which most recently shipped the handheld version of De Blob, no longer appears on the company's interactive studio map, though details of their potential layoffs are unconfirmed.

The publisher has been showing signs of such a move, despite serious potential in the licensed games market. Several months ago the company nixed several games from its scheduled roster, including new additions to franchises like Juiced and Stuntman from the studios mentioned above. We've seen similar financial struggles recently from other small U.S.-based publishers like Midway. Analysts have predicted that the flailing American economy would hit smaller publishers more than large ones, and we may be starting to see signs of it here. We'll keep you updated as we hear more, and until then our thoughts are with the unfortunate people laid off today.