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Details are sketchy, but the following facts have been confirmed: after the release of The Witcher, CD Projekt Red took the financial obligation of starting 3 projects simultaneously, a console port of The Witcher, and two more titles based on The Witcher intellectual property, one of which was The Witcher 2.
As the financial crisis hit, the studio was affected as well, finding itself incapable of managing all three projects and forced to lay off a significant portion of its staff. The third Witcher IP project was cancelled, and its entire crew was let go or left of their own volition. A second round of layoffs followed as The Witcher: Rise of the White Wolf was cancelled, including around two dozen people losing their jobs yesterday.
All funds and manpower have been redirected to a single project, The Witcher 2, which will be a multi-platform title for PC and consoles.