This Digital Illusions' Press Release (thanks Frans) announces that DICE is closing their New York offices. DICE New York was the arm of the Swedish developer formed upon the acquisition of Trauma Studios, developers of the Desert Combat modification for Battlefield 1942. According to the announcement, the dozen employees of DICE New York are being offered the opportunity to relocate to Sweden, and that DICE Canada will continue to operate, focusing on expansion packs. The wording of the announcement makes it sound like this move enables DICE to renege on a scheduled payment:

Digital Illusions will not pay the supplement payment of 200,000 USD as agreed upon at the time of the acquisition of Trauma Studios. The total payment is thereby 300,000 USD. Following the adjustment for the default of payment of the additional supplement payment, the SEK 1.3m remainder of the value of goodwill is written down during the second quarter of 2005. Other costs of liquidation are diminutive.

Update: Gamecloud has a reaction from Frank DeLise of Trauma/DICE NY saying those not relocating to Sweden are being provided with severance packages, and he personally was taking a vacation before returning to game development.