Silicon Knights, developer of X-Men Destiny and Too Human, has confirmed sizable layoffs. The Canadian studio has let go of 45 employees, or slightly more than half of the team. This is a smaller figure than rumored yesterday, but is still a significant cut.

According to the studio, the reason for the layoff is the cancellation of a new game which had "been in the works for months" and was canceled at "the final second." The lack of work is what resulted in the layoff.

Mike Mays, chief financial officer of Silicon Knights, explained to the Financial Post (via Joystiq) that the team is currently negotiating contracts for new projects. "Hopefully this layoff will be short term," Mays noted.

It's unclear what the canceled project was. One game that the studio had reportedly been shopping around was an open-world horror game, which both Sega and THQ picked up and subsequently dropped.

So what is Silicon Knights working on now? Kotaku was told that "the company is currently refocusing and returning to its roots, working on one of its most requested titles for the next generation." In spite of the studio's recent bombs, the company has a legacy of high-profile titles: Legacy of Kain, Eternal Darkness, and the Metal Gear Solid remake, Twin Snakes. A continuation (or HD revamp) of any of these titles will undoubtedly be one of the studios' most requested titles.