Embark Studios surprise launched its new FPS during The Game Awards 2023.
The studio says the lack of support for VR in the industry has taken its toll.
Wit Studio is also the team behind Spy Family.
PTW was previously known as Pole To Win and has served as quality assurance and studio support for many of the industry's biggest companies, including Blizzard, Sega, Capcom, and more.
The layoffs started in December, with 45 employees let go last week.
The job cuts have apparently only affected staff working on an unannounced game to be published by Square Enix.
Stig Asmussen's new studio is headquartered in Los Angeles but will feature remote developers from around the world.
According to CEO Swen Vicke, the studio is also moving on from Dungeons & Dragons in general.
Xbox closed four studios this week, including Arkane Austin and Tango Gameworks.
The studio comes from developers with experience working on series like The Last of Us, The Witcher, Destiny, and Uncharted.