Greg MacMartin, lead designer on Cavedog's first person shooter made a post to the Cavedog forums with an update on why a large portion of the design team was let go (thanks Billy "totallyannhiliated" Wilson):

Everyone:

Please do not think that Amen is now hopelessly behind schedule because of what has happened. Yes, this will cause delays, but we're still firmly looking at mid next year for release.

I also want to make clear one thing. A *LOT* of design work has been completed for this game. 80% of the environments have been constructed in various forms of completion for the entire game. Our goal of what we are striving to accomplish has never been clearer. But it was becoming apparent that we (as designers) were definitely WAY ahead of the programmers. We were more than ready to make use of features that weren't scheduled to be implemented for months later by the programmers. And this was becoming a serious concern for the company.

Sure, this is a difficult time for all of us and it isn't easily going to be forgotten...but this WILL allow the engine and the core basis of the game to be completed with less pressure on the programmers.

And it also means that when we re-hire a full design team (hopefully all of the original guys!!!), there will be nothing stopping them from creating the experiences that we've been attempting to create for Amen in the last two years.

It is certainly a very controversial decision...for everyone involved. But it has been made. And we are going to do everything we can to push forward and make the most incredible gaming experience possible...which has been our goal all along. :-)

-Valarian (aka Greg MacMartin, Lead Designer, Amen)