The developers announced the layoffs in an official statement, emphasizing that it was a difficult step:
We had to significantly reduce the size of the company. This means saying goodbye to many talented people who have made a huge contribution to our projects. We thank everyone affected by this decision.
Polyarc was founded by people from Bungie and Rockstar. The team has earned recognition for the games Moss and Moss: Book II, which stood out in the VR entertainment market with a unique mechanic of communicating with the main character using sign language.
According to unofficial information, the canceled project could have been the next part of the Moss franchise, but the studio has not yet confirmed the rumors.