Free Fire developer Garena is reportedly laying off hundreds of workers in Shanghai, according to a report from Reuters.

People familiar with the matter told Reuters the move is the result of Garena's parent company, Sea Limited, reorganizing its business operations to cope with market "uncertainty."

Sea is reportedly pulling its Shopee e-commerce arm out of Argentina, and scaling down operations in Chile, Colombia, and Mexico to "focus resources on core operations" following a $1 billion quarterly loss.

Despite Free Fire being one of the company's major revenue drivers, the parent company has also sanctioned layoffs at a major Garena development centre in Shanghai.

Two sources with knowledge of the situation said that up to 15 percent of employees in Shanghai were let go this week, meaning hundreds of staff members were affected by the decision. Other sources have also indicated that multiple game projects have now been cancelled.

Although it stopped short of confirming those numbers directly, a Sea spokesperson told Reuters that "in line with our previously stated focus on enhancing the long-term strength of our ecosystem, Garena has made some adjustments to certain teams." According to the company, those "adjustments" impacted employees across a number of disciplines.

To offer some context as to how crucial Free Fire is to Garena and Sea, the battle royale shooter surpassed 1 billion downloads on Google Play alone in July 2021. In May 2020, the title was also pulling in around 80 million daily active users. 

Earlier this year, however, the shooter was banned in India over apparent links to China, with officials in the country seemingly taking issue with the fact that Chinese company Tencent owned a 18.7 percent stake in Sea.

PUBG maker Krafton also filed a lawsuit against Garena in the United States, alleging that Free Fire included numerous copyrighted aspects of its own battle royale shooter.