Huh, you'd figure as the prime studio behind Kinect so far, they wouldn't be cutting back, unless Microsoft assumes that Rare's contributions can be done for less...

I can't see Microsoft shedding itself of any of its studios. Rare is still a big name in the industry, even if the post-Nintendo era has been less than stellar.

More info...

Sources confirm reports that studio has significantly cut back on its art department, replacing full-time artists with contractors.

The news broke in a 4Chan post last month, a screengrab of which can be found here. “In an effort to cut costs,” it reads, “Rare has cut their last permanent members of art staff. All artists working there are temps.”

Two separate, independent sources close to the studio have confirmed the news to us under condition of anonymity. Our first source tells us that the entire art department at Rare – some 42 staff – were told their jobs in the firm’s Twycross headquarters were at risk of redundancy, and all affected staff had to apply for 23 managerial jobs at Rare’s new offices in Birmingham.

That means an effective cut of 19 staff – the maximum number of redundancies allowed under EU employment law without the need for a full consultation process. However, our source says “some negative feeling has led to additional artists taking the very generous voluntary redundancy packages,” taking the number of redundancies beyond 20. Our second source does not know precise numbers, but says that “due to the consultation period coming in, it would seem to be more than 20.”

The implication of seeking to avoid a lengthy, costly and potentially awkward consultation and offering generous voluntary terms is that Rare wants this done as quickly, and easily, as possible. Our source tells us that the remaining artist jobs are “management roles in name or fact, chiefly project managers. Meaning that all the actual artists are redundant.”

When we contacted Microsoft for comment we were told: “I can confirm that a small number of employees in the art department of Rare Studios have been informed that their roles are at risk of redundancy. While redundancies are never easy, these organizational changes are part of Rare’s ongoing strategy and operational planning which typically coincides with the shipment of a title. We are working closely with the affected employees to support them through this transition and help them apply for other roles within Microsoft.

"Whilst we’re not discussing the exact numbers involved, I can assure you that it’s far fewer than you’ve indicated and represents a small percentage of the total Rare team."

The move to become a development studio primarily staffed by contractors would suggest that the staffing changes are rather more long term than simply the result of finishing Kinect Sports, as the game industry moves to replicate the “Hollywood model” of hiring workers on short-term contracts, with development outsourced to a variety of different studios. One of our sources says that development the Kinect Sports franchise may well be shared between Rare and Vancouver’s Big Park, developer of Kinect Joy Ride.

The news comes after a sequence of changes at Rare, with Scott Henson, previously a core member of Microsoft's Xbox team in Redmond, joining as studio manager in October last year, replacing Mark Betteridge. Henson said at the time, "How I envision Rare, is that they'll continue to innovate, continue to partner with folks like the Platform team - that's part of my heritage - and continue to bring those experiences to life. When I look at what they've accomplished in that domain, I see a very bright future. I think we're very strongly positioned around Kinect Sports, so we'll just build on that success."

Microsoft continued in its statement to us regarding the layoffs: "Rare is currently in a position of some considerable strength as Kinect Sports sales have far exceeded global expectations and the title is No. 1 on the Kinect platform."

By hiring contractors instead of full-time employees, studios not only save money on wages that would be paid during downtime between projects, but effectively opt out of employment legislation. Under EU law, the only recourse an employee has to a tribunal hearing is for discrimination on grounds of age, race, gender or sexuality, until they have served for a company for 12 months. In the case of redundancy, a fixed-term contractor has to have at least two years’ service to have the same rights as permanent staff.

http://www.next-gen.biz/news/rare-makes-staff-cutbacks

Well Rare, was nice knowing you.

I think its just MS being cheap and not wanting to pay for a full staff, IMO