Codemasters has begun a 30 day consultation period at its Guildford studio, with the proposal to retire the team behind FPS flop Bodycount.
If the publisher decides to go ahead with its plan the studio will be closed 30 days from now - its 66 staff have been informed.
The closure of its Guildford studio will open the door for further growth of the racing team at Codemasters' Warwickshire headquarters which handles DiRT, Grid, F1 Online and the EGO engine. A new team will also be formed in Birmingham alongside the F1 2011 team to work on a "new racing IP".
Guildford staffers will be "encouraged" to apply for positions at the Warwickshire and Birmingham studios.
Bodycount failed to make an impact in the UK chart, debuting at No.36 earlier this month.