The odds are that if you know about Silicon Knights then you know them by the games that they have helped to create. They have had their hands in games such as X-Men: Destiny, Too Human (which was released in 2008) and Eternal Darkness: Sanity’s Requiem (which came out for the GameCube in 2002). While some of these games have not received the best reception from fans or critics, most notably their recent offering, X-Men: Destiny, the company has, on the whole has a decent track record.

It was recently reported that the Canada-based game maker was letting go all of their staff, except for 25 members. While these reports were shown to be from not one, but two reputable sources close to the company, they did not turn out to be completely true. The company was quick to make a correction to the false information. While the folks at Silicon Knights did not let go of nearly as many of people as the company expected, the did lose a few workers. The company let go of 43 employees.

In a statement made to Kotaku, a popular video gaming blog, the company corrected the misinformation. “Last week Silicon Knights experienced layoffs due to extended contract negotiations falling through with a potential partner,” they corrected. “We are currently in discussions with other potential partners. The recent Ontario government funding is tied to future performance targets, spread out over the next 5 years, which we will meet… The company is currently refocusing and returning to its roots, working on one of its most requested titles for the next generation.”

This turnabout is a little bit odd considering how quickly the fortunes changed for this gaming company. After all it was just this summer, July to be specific, that the company was saying that it getting ready to expand. Back then the company president, Denis Dyack, announced that the company had received a series of investments, most recently a $3 million grant from the Ontario government, that would allow the company to expand significantly.

This funding was expected to allow the company to expand its technology, preserve 97 of the current workers jobs and even allow them to hire on an addition 80 members to the staff. There is nothing to be said for how exactly their position changed so drastically, but clearly something big happened to make a change in the fortunes of the company so swiftly.

Of course, these layoffs did not come without warning at all. Anyone who had been keeping an eye on the LinkedIn profiles of many of the workers at the company you would have seen a whole lot of people who were updating their resumes and making new connections. These can be seen as sure signs that the people inside the company are expecting to have the staff let go in the near future, always a harbinger of a grim future for your organization.

Silicon Knights has had a solid history of receiving funding in the past. In 2008 they received $1 million. In 2010 they got $4 million from the federal government.