Rumor: Massive layoffs at Sony Online Entertainment [Update] As much as a third of Sony's MMO-making division has been laid off, according to rumours, and three studios may be outright closed.

[Update 12:30pm - XdM] An anonymous source at Sony Online Entertainment tells Shacknews that rumors of layoffs and the cancellation of The Agency are accurate. According to the source, a number of the layoffs also reduced the size of the EverQuest 2 team and although the Planetside Next team also took some layoffs, the project is alive and well.

[Original Story - AO] Rumours are circulating that Sony Online Entertainment, the company's MMO-centric division, has been hit with massive layoffs and three studios have been outright closed.

The first word came from 3D Realms veteran George Broussard, who tweeted, "Word that Sony Online Entertainment Seattle is having layoffs and that studio closure is possible."

A shadowy Kotaku source claims that Sony's Seattle, Denver and Tuscon studios are closing. The three are respectively responsible for The Agency, Magic: The Gathering - Tactics, and Pox Nora, among other games.

Kotaku also reports that half of the DC Universe Online studio Austin were let go, as well as many at EverQuest II studio San Diego.

All in all, the layoffs are said to have reduced Sony Online Entertainment's workforce by a third.

SOE Seattle's action-espionage MMORPG The Agency was announced back in 2007 but has still yet to see the light of day, suffering repeated delays. It's not quite clear how these supposed layoffs and will affect the game, which is expected in the second of this year, but it can't be good news. The fate of Planetside Next, SOE's follow-up to MMO shooter Planetside, is also unknown for now.

Sony has yet to officially confirm these rumours.