Well I believe that a heavy metal band Nailbomb produced an album in the 90s, which has a title quite suited to this situation;
'Proud to Commit Commerical Suicide'
A bit overkill, but nevertheless a mistake in my opinion. Unless the studio has made a loss of many, many millions, I'd love to see how they remotely justify this. I wonder where all those Kaos and Digital Warrington employees will go THQ? Possibly to companies not called THQ?
Sure, if a studio isn't doing well, then that's a problem, but shutting them down sounds a really stupid/extreme idea, especially since you're losing talent who will likely join or form rival companies.
Anyway, best wishes to the staff at both places; I hope you don't end up as more depressing employment statistics.