source: (1up.com)

Rumors begin circulating earlier today that EA would be shutting down Pandemic Studios, the developer behind Mercenaries, Full Spectrum Warrior, Star Wars: Battlefront, and Destroy All Humans. They were currently at work on The Saboteur, which is set for release on December 8. Kotaku reports that The Saboteur IP will be moved over to EA Montreal, the team responsible for Army of Two, Skate It, and Spore Hero.

1UP has confirmed with an anonymous source at Pandemic that the rumors surrounding the studio's closure are indeed true.

EA acquired Pandemic, along with BioWare, just over two years ago for a whopping $860 million. That was, of course, before the economy took a turn for the worse, which is likely at least partially at fault. EA recently declared that it would be releasing fewer games in the next fiscal year (sure to not be good news for Pandemic or any other EA-owened developer), and also announced just over a week ago that it would lay off 1,500 people or about 17% of its total workforce. Pandemic was not listed among the developers that would be downsized at the time, so it's unlikely that these layoffs were included in that figure.