Reports have been circulating since late last week that the vast majority of Flagship Studios' employees have been laid off. Some rumors stated that the studio had lost control of its Mythos and Hellgate: London IP and that the developer had shut down entirely. In response to these reports, Flagship has issued a press release, saying that the company is still operating and still owns the Mythos and Hellgate: London IP. However, Flasgship confirmed the mass layoffs and added that all current Hellgate: London subscriptions will not be billed and new subscriptions will not be taken.

"It is with deep regret that I must announce that Flagship Studios has laid off most employees. However, the core management and founding team members are still at Flagship." said Bill Roper, CEO of Flagship Studios. "The past five years have been an incredible experience for us, but unfortunately, we couldn't sustain the size of the company any longer."