While the layoffs will cross multiple departments, the Austin studio is taking the brunt of the blow, as it's being shut down completely. This was the studio that was working on the already-canceled "Criminal" project, and it sounds like the studio had become a skeleton crew working on tech for the other teams and perhaps working on some of these now-suspended games for 2010-11. Chicago and San Diego have also seen cuts of some kind.
Matt Booty, Midway's CEO, had this to say on the issue:
“The cost-reduction measures are vital for us to rationalize our operations and provide the resources necessary for our core properties to succeed. These initiatives, along with the other steps we have taken this year, are a response to the specific challenges we are facing at Midway, many of which have been amplified by the current economic conditions.”
In other layoff news, Edge is reporting that 37 people have been let go over at Factor 5. This is said to be around 50 percent of the company's workforce. You may remember that an employee--now a former employee--named Sam Baker posted on his personal blog that employees weren't getting paid on time and that health benefits for employees had been cut. According to Edge's source, Factor 5 is considering legal action against Baker, who has resigned in the wake of all this.
Factor 5 hasn't issued any official comment on the matter.