RIP
I'm glad no one lost their job, put them on tlou factions *cough*
They have many very experienced, successful and valuable people.
In addition to the game they also built an entire workflow with engine and tools that highly surprised Cerny and Hermen. A workflow that improved many processes and general productivity because many tools people use for gamedev, meetings and project management etc where integrated in the cloud, highly reducing some times (like render times, or copying huge chunks of files from a computer to another), making remote work easier and safer etc. Pretty likely they've been sharing these things wtih the other teams and will support them in these areas and not just in the traditional ones (extra artists, coders, etc)
If they don't fire anybody pretty likely is because they were doing well what they were supposed to do, but at some point saw the project wasn't going to work well enough after doing a few attempts to improve it and save it.
I am gonna assume it's because of the Canadian Government investment
Goverments don't invest in studios. To invest in a studio is to buy a portion of it, so you get dividends if gets profitable and hopefully can sell that part later for a higher price in case it gets more valuable.
What governments do is to support companies or projects in cultural or tech/innovation areas with grants or tax credits to favor companies creating jobs in these areas there, sometimes limited to hiring young people from there. They use to be pretty strict with the projects accepted and there's an important paperwork to get it and to periodically show that the project is properly progressing. On average around 90% -varies a bit depending on the country- of the new companies in general (also applies for gaming) die in under 5 years, so they have covered the case when a game gets cancelled, because grants often are given to new companies.
In some cases when the project gets cancelled or doesn't generate enough money the company still has to bring them back the money or part of it (it's like getting a debt with a bank but with better conditions, and sometimes with the governement paying a part of it if the company can't return it). In other cases nothing happens, like in some casses when the way they supported them is lowering some tax.
Nishino is course correcting the previous regime's strategy.
The one in charge of the studios and to decide if a project or studio gets shut down is Hermen.
Nishino is in charge of the hardware, accesories, store, PSN, marketing and 3rd party relationships area.