The Santa Monica company insisted that it will not be selling Radical, which created the "Prototype" series of games. Activision cited poor sales of "Prototype 2" as the reason for downsizing the studio.
Based in Vancouver, Canada, Radical has developed "Scarface: The World is Yours" and "Crash: Mind Over Mutant," among other games. It has also developed titles for the "Crash Bandicoot" game series.
Radical, which was previously owned by Vivendi, became a part of Activision's empire in 2008 when Vivendi purchased a majority stake in Activision and merged it with Blizzard Entertainment studio to create the world's largest game publisher. Activision remains a division of Vivendi, which is contemplating spinning off its entertainment assets from its struggling phone business.
The layoffs at Radical affect 1.2% of Activision's total employee base of 7,400 workers.
"Having explored a wide range of options, Activision believes that the only option is a significant reduction in staff," the company said in a statement.