Krome CEO Robert Walsh made it very clear last year that developers' budgets "have probably doubled or tripled during the console transition," which likely doesn't make it easy to run a studio -- especially such a large one. We've contacted Krome for comment and will update if we receive a response.
Update: Krome has responded to Joystiq saying, "We regret to confirm an unspecified number of positions have been eliminated today at Krome. The industry worldwide is facing new challenges and Krome is not immune to the effects of this. Beyond that, we cannot make a comment."
Source -- Rumour: Aussie developer Krome hit with layoffs [IGN]
Source -- Krome loses more work and more employees [AusGamers]