As reported Tuesday, Square USA Vice President Junichi Yanagihara has released an official statement in regards to rumors of a layoff and possible closure at the company's Los Angeles studio. In short, the studio's FMV development segment is being closed down, with the movies now being created at other Squaresoft-owned studios. Square USA's game development team will remain intact at the Los Angeles office. Full text follows:

"Square USA has made the decision to restructure its organization, most of which will affect the Los Angeles Studio. In the past, our parent company, Square Co., Ltd. in Tokyo, Japan, has directed a number of its game production FMV jobs to our Los Angeles studio. For various reasons, this is no longer happening. With no game production FMV jobs in the Los Angeles Studio, unfortunately, there is no need for a game production FMV team. While this reorganization will affect our game production FMV team in Square USA's Los Angeles Studio, it will in no way affect our game production development team, which will remain intact in Los Angeles.

While relatively few of Square USA's employees will be affected by this decision, a number of those who are affected may be given the opportunity to join other teams in either our Los Angeles or Honolulu Studio. All employees affected by this decision will be given every reasonable assistance in finding future suitable employment.

I can assure you that this decision has in no way been looked upon lightly by our company's management, but rather has been given much thought and consideration. Square Co., Ltd., Square USA, Square Soft, Inc. and Square Electronic Arts L.L.C. pride themselves in their employees whose enthusiasm and devotion to the video game industry has made us what we are today."

Source: [Next Generation Online]