This is a sad, but not unexpected day.

According to WPRI in Providence, Rhode Island, 38 Studios has laid off their entire staff. The studio management sent the following email to all employees:

The Company is experiencing an economic downturn. To avoid further losses and possibility of retrenchment, the Company has decided that a companywide lay off is absolutely necessary.

These layoffs are non-voluntary and non-disciplinary.

This is your official notice of lay off, effective today, Thursday, May 24th, 2012.

Quite frankly, to call this an “economic downturn” is insulting. The company ran through nearly $50 million of Rhode Island taxpayer money. If anything, they had a sweeter deal than any other studio I can think of.

The extent of the mismanagement and squandering is unknown at this point, but expect there to be a complete overhaul of the state’s Economic Development Corporation as a result. This blemishes the industry and will make it harder for small studios to get a leg up. Let’s just hope that others can play on with this bloody sock.

We reached out to both 38 Studios and Big Huge Games for comment, but have not received any response to any of our inquiries.