Double Fine has laid off 12 staff members after an unannounced project was unexpectedly cancelled by its publisher. Tim Schafer relayed the sad news to GamesIndustry.biz, while noting that the company's previously announced, and in development, games—Broken Age Act 2, Massive Chalice, and Grim Fandango Remastered—will all be unaffected by the departures.
Here's Tim saying pretty much the exact same thing, in his own words:
"One of our unannounced projects was unexpectedly cancelled by its publisher, forcing us to reduce our staff by 12 people. Our remaining projects--Broken Age, Massive Chalice, and Grim Fandango Remastered, were unaffected."
Double Fine haven't revealed anything about the game in question, but it's a relief to hear that Broken Age's belated second act, Massive Chalice, and the Grim Fandango re-release are still on track. Emanuel Maiberg recently got his hands on the second one—you can read his thoughts about it here.
Best of luck to those affected by this news.