Sony has announced a significant round of layoffs affecting around 900 staff, or about 8% of its global PlayStation workforce.
The layoffs affect a number of PlayStation studios, including Insomniac, Naughty Dog, Guerrilla, Firesprite, and, most significantly, PlayStation's London studio. Alongside the layoffs, a number of in-development games are cancelled, Sony said.
In a blog post, outgoing Sony Interactive Entertainment boss Jim Ryan issued an update on what he called a “difficult day at our company.”
“We have made the extremely hard decision to announce our plan to commence a reduction of our overall headcount globally by about 8% or about 900 people, subject to local law and consultation processes," Ryan said. "Employees across the globe, including our studios, are impacted."
...the industry has changed immensely, and we need to future ready ourselves to set the business up for what lies ahead.
“These are incredibly talented people who have been part of our success, and we are very grateful for their contributions. However, the industry has changed immensely, and we need to future ready ourselves to set the business up for what lies ahead. We need to deliver on expectations from developers and gamers and continue to propel future technology in gaming, so we took a step back to ensure we are set up to continue bringing the best gaming experiences to the community.”
Ryan published an email he sent out to staff this morning, and reassured PlayStation gamers that “our plans for reorganizing and streamlining are so we can continue to deliver the best gaming experiences possible.”
In the email to staff, Ryan said “tough decisions have become inevitable” and that the layoffs affect employees across all SIE regions, with several PlayStation Studios affected.
U.S. employees will be told today if they still have a job. In the UK, where labour law requires a consultation process for mass layoffs, Sony has proposed shutting the PlayStation London Studio, which had previously created VR games, entirely. Ryan didn’t confirm this in his email, but it seems likely London Studio’s co-op PlayStation 5 game set in a modern fantasy London is cancelled.
Ryan also announced layoffs at fellow UK studio Firesprite, which is working on a new narrative game. The status of that game is unknown. Elsewhere, Ryan announced reductions in various functions across SIE in the UK.
“The proposed changes mean that we will enter a period of collective consultation before any final decisions are taken,” Ryan said. “All employees who are part of the collective consultation will be made aware of the next steps today.
“For those who will be leaving SIE: You are leaving this company with our deepest respect and appreciation for all your efforts during your tenure.
“For those who will be staying at SIE: We will be saying goodbye to friends and colleagues that we cherish during this process, and this will be painful. Your resilience, sensitivity, and adaptiveness will be critical in the weeks and months to come.
“This will not be easy, and I am aware of the impact it will have on wellbeing. Affected employees will receive support, including severance benefits. While these are challenging times, it is not indicative of a lack of strength of our company, our brand, or our industry. Our goal is to remain agile and adaptable and to continue to focus on delivering the best gaming experiences possible now and in the future.
“Thank you for your understanding during this difficult period. Please be kind to yourselves and to each other.”
We looked at our studios and our portfolio, evaluating projects in various stages of development, and have decided that some of those projects will not move forward.
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In a separate blog post, Hermen Hulst, Head of PlayStation Studios, confirmed the layoffs impact Spider-Man developer Insomniac, The Last of Us developer Naughty Dog, as well as Sony's U.S.-based Technology, Creative, and Support teams. Horizon developer Guerrilla is also affected.
Hulst confirmed some games had been cancelled as part of a "re-evaluation of how we operate", but failed to name them. "We looked at our studios and our portfolio, evaluating projects in various stages of development, and have decided that some of those projects will not move forward," Hulst said.
"I want to be clear that the decision to stop work on these projects is not a reflection on the talent or passion of team members. Our philosophy has always been to allow creative experimentation. Sometimes, great ideas don’t become great games. Sometimes, a project is started with the best intentions before shifts within the market or industry result in a change of plan."
Following yesterday's announcement, Insomniac's official X/Twitter account published a statement acknowledging the layoffs, saying it was focused on channeling its energy to help those impacted during "this challenging time."
— Insomniac Games (@insomniacgames) February 28, 2024
According to leaked documents, Sony had called for staff cuts across its first-party studios. Dreams developer Media Molecule suffered a round of layoffs, there were significant cuts at Destiny developer Bungie, and prior layoffs at The Last of Us developer Naughty Dog.
The Sony cuts come during one of the most difficult periods the game industry has ever faced, with mass layoffs throughout 2023 and continuing into 2024. Last month, Microsoft axed an eye-watering 1,900 staff from its video game workforce following the $69 billion acquisition of Call of Duty owner Activision Blizzard. IGN recently spoke to developers about these layoffs to try to explain what was causing them.
Earlier this month, Sony admitted sales of the PS5 during the crucial holiday quarter had failed to meet expectations. Sony had set an ambitious target of 25 million PS5s sold during the current financial year ending March 31, 2024, but revised its forecast down to 21 million after sales came in lower than expected despite aggressive promotions. Sony sold 8.2 million PS5s during the third quarter ending December 31, 2023, up from 7.1 million sold during the same quarter the previous year, but that was not enough to hit Sony’s lofty target.
Elsewhere, Sony has said it will not release any major existing PlayStation franchise games before April 2025, ruling out big sequels in the God of War and Spider-Man franchises any time soon.
Editor's Note: This story has been updated to include a statement from Insomniac Games.
Wesley is the UK News Editor for IGN. Find him on Twitter at @wyp100. You can reach Wesley at wesley_yinpoole@ign.com or confidentially at wyp100@proton.me.
