Update: Gearbox president Randy Pitchford has responded to the rumors in a comment post, saying that Aliens: Colonial Marines has not been cancelled.

"Aliens isn't canned," said Pitchford. "We've made some transformative changes and yes, that's meant some talent changes, but that's not the real story. The true relevance of the story will actually be irrelevant until we release our next game, at which time I hope there will be a lot of interest in what we've done that can produce such results."

Original story: Production on Gearbox Software's shooter Aliens: Colonial Marines (PC, 360, PS3), a four player co-op shooter based on the classic film franchise, has been halted, according to multiple sources.

Several sources have also told Shacknews that Gearbox today laid off between 15 and 25 employees, with one putting the number at 26. These sources independently claimed that the poor performance of Brothers in Arms: Hell's Highway and the stoppage of work on the Aliens title were contributing factors to the layoffs. Though specific sales data on Hell's Highway is unavailable, the title debuted on the NPD group's weekly PC sales chart at ninth position, before quickly falling off the following week. Hell's Highway did not place on the US console sales chart for either September or October--the console versions of Hell's Highway were released on September 23--though publisher Ubisoft partly attributed its strong second quarter sales to the game.

Aliens: Colonial Marines was announced in February. Billed as an authentic Aliens shooter, Colonial Marines was backed by a strong pre-production team, including writers from the hit TV show Battlestar Galactica. The Sega-published title was previously scheduled for release in 2009.

Gearbox has expanded to develop a wide range of projects recently, shipping Brothers in Arms: Hell's Highway (PC, 360, PS3) and Samba de Amigo (Wii) earlier this year while simultaneously working on its original shooter Borderlands (PC, 360, PS3).