Develop is posturing that the closure, if true, is probably a result of Haze being a commercial and critical flop. Not only that, but the word is that their Lucasarts collaberation (Star Wars BattleFront 3) is reported to have been cancelled and they were having trouble finding a publisher for TimeSplitters 4. Sadly, it seems that game will now never see the light of day. We'll update this story as soon as we get confirmation either way but, as we say, it's not looking good. It's a sad day and we feel for anyone who has lost their job -- especially this close to Christmas.
[UPDATE] We've received confirmation that Free Radical has, indeed, closed its doors. This is no longer a rumor. GameIndustry.biz is reporting that Star Wars Battlefront 3 has been passed on to PSP Battlefront developer Rebellion.