Square Enix, which purchased IO Interactive last February, has confirmed the cuts to Joystiq. Reports put the number of employees let go at 35 from a group of around 200.

The general manager of IO Interactive, Niels Jorgensen, has released the following statement:

Every studio has to take decisions to ensure it is operating effectively as projects start up and ramp down. IO Interactive has assessed the internal and external resources needed to support its pipeline and this has led to organizational changes which will include the loss of some roles at the studio. We believe that this decision will make IO continue to deliver great games and add momentum to our operations. We would like to thank all employees affected for their contribution and efforts and wish them well in their future careers.

The studios next title, Kane & Lynch 2: Dog Days, will be released in the United States on August 24 (Europe: 27th) for the PC, PlayStation 3, and Xbox 360.