Kotaku reports that several former employees of Blue Omega, developer of the recent action title Damnation, have confirmed that the entire development team has been laid off following a series of issues with publisher Codemasters.

The former employees allege that there were a string of lawsuits behind the sackings, stemming from original developer Blue Omega being "taken off" their own game by Codemasters. There was also said to be a dispute between Blue Omega and two subcontracting studios: one of which has been accused of having continued to work on the game even after Blue Omega stood down, while the other is said to have produced shoddy work.

Additionally, the former Blue Omega employees told Kotaku that poor sales of the Xbox 360, PS3 and PC action title were also a contributing factor to the lay offs.