Sony issued a statement confirming the studio's cuts but pledged continuing support to the crossover fighter and promised to release DLC updates as scheduled.
"SCEA can confirm that SuperBot Entertainment did make a reduction in their workforce today," Sony told Polygon.
"The studio and SCEA remain committed to supporting PlayStation All-Stars Battle Royale post launch, including developing the title's forthcoming DLC releases in the coming months.
"The first character pack [including Kat from Gravity Rush and Emmett Graves from Starhawk] will be available for download on February 12 and will be free for the first two weeks. We'll be sharing news of additional upcoming content soon."
News of the layoffs was first broken over Twitter by Insomniac Games developer Mike Birkhead, who said that the number of outed staff stands at "around 20", but this figure has not been officially confirmed.
PlayStation All-Stars Battle Royale is out now for the PS3 and Vita.
> Read Digital Spy's PlayStation All-Stars Battle Royale review
Watch the live-action PlayStation All-Stars Battle Royale TV spot below: