San Francisco based "The Orphanage" has called it quits. These guys have been creating effects for films, television, and commercials for quite a while.
I'm not sure we can blame it entirely on the economy or what. My guess is that it has a lot to do with studios underbidding everyone else in order to get work. It is amazing how little money the big effects companies bring in these days. One or two slip ups can really screw you over.
You can bet that several more studios are going to go out of business before the world climbs out of this financial shit hole.