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bdbdbd said:
@Makinmusic: People have a short memory, but here:

http://www.gamesindustry.biz/articles/scee-to-lay-off-160-employees

http://blog.wired.com/games/2007/04/sony_american_j.html

The first link doesn't mention specifically who was laid off, and the second link mentions that staff from various marketing departments, mostly related to E3 prep (which had been downsized around that time, if you recall) were laid off.  It doesn't sound like any specific developers were laid off, and if they were, we likely would have heard about it, just like we heard when David Jaffe left Sony Santa Monica, when Naughty Dog guys left to form Ready at Dawn, etc.

Every one of Sony's studios makes at least one pretty well known franchise (whether it be MediEvil, or whatever), and if one of these studios had been significantly downsized, let alone shut down, we would've heard about it.  According to every source I know, even the studios that don't have a title announced at the moment are all still working at full force (like Sony Cambridge).