As part of a “cost-reduction plan,” publisher Midway announced today that it is closing its Austin, Texas-based development studio. Additionally, several non-core projects previously scheduled for release in 2010 and 2011 are being axed. Workforce reductions are taking place as well. In a statement, the company noted that a considerable amount — 25 percent — of employees will be laid off.

“The cost-reduction measures are vital for us to rationalize our operations and provide the resources necessary for our core properties to succeed,” said Matt Booty, president and CEO of Midway. “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.”

Full announcement can be found after jump. For all those affected by the cuts, we wish you luck. With the financial state Midway has been in, hard to have not seen this coming, though.

Midway Announces Cost-Reduction Measures

Actions include layoff of 25% of staff, closure of Austin studio, and suspension of several non-core projects

Midway Games Inc. today announced that the company is taking significant steps to reduce its cost structure, including a reduction in workforce, the closure of its Austin, TX, studio, and the suspension of development on several non-core games.

The cost-cutting initiatives will involve a reduction in force across multiple disciplines within the company in its Austin, Chicago and San Diego locations. Headcount will be reduced by approximately one quarter of Midway’s global workforce. The suspended non-core projects were previously scheduled to release in 2010 or 2011 and have not yet been made public.

“The cost-reduction measures are vital for us to rationalize our operations and provide the resources necessary for our core properties to succeed,” said Matt Booty, president and CEO of Midway. “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.”

Additional details on the reduction and the financial impact can be referenced in the report filed today on Form 8-K with the Securities and Exchange Commission.

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