Curt Schilling’s troubled 38 Studios laid off its entire staff in Rhode Island and Maryland on Thursday in a stunning turn of events for the former Red Sox pitcher’s ambitious gambit to build a video game franchise off the back of a winning baseball career.

The decision comes less than two weeks after 38 Studios’ financial woes surfaced and deep cracks began appearing in the six-year-old company. It was lured from Maynard to Rhode Island on the promise of a $75 million loan guarantee from a state hoping Schilling’s vision could bring high-paying jobs.

“I’m stunned, and I’m heartbroken,’’ said R.A. Salvatore, a Leominster fantasy author who was a consultant to 38 Studios and whose son worked at the company. “This is one of the best teams I’ve ever seen assembled. They were doing amazing work.’’

The company, which employed more than 400 full-time workers and contractors, moved to Providence in April 2011 and by February of this year had released its first game, Kingdoms of Amalur: Reckoning.

But 38 Studios missed its May 1 payment of $1.1 million to Rhode Island and did not have enough cash to meet its payroll on May 15. To stay afloat, it asked Rhode Island for more money, applying for $8.4 million in film-tax credits, which it could then sell to other companies seeking to lower their tax bills.

The company did not inform Rhode Island Governor Lincoln Chafee about the layoff. Chafee said the state has not been able to confirm how many workers were let go and has struggled to get other critical details since 38 Studios ran into financial trouble.

Still, Chafee said he is open to working with the company to help find ways for it to survive.

“I have not given up,’’ he said. “But I am also a realist. What we’ve learned from [industry] experts is grim news. Very, very grim.’’