Mass layoffs at PlayStation: 900 job cuts across various studios, closure of London Studio, and game cancellations

Sony Interactive Entertainment (SIE) has decided to lay off 900 employees. The move will affect people at various PlayStation studios and divisions.

UPDATE: The article was updated to add details about the layoffs and game shutdowns from Bloomberg reporter Jason Schreier

SIE president and CEO Jim Ryan announced the layoffs in a blog post, saying that the company’s global headcount of over 11k will be reduced by about 8%.

He noted that “through discussions over the past few months about the evolving economic landscape, changes in the way we develop, distribute, and launch products, and ensuring our organization is future ready in this rapidly changing industry,” PlayStation decided to restructure its operations.

PlayStation Studios head Hermen Hulst detailed the upcoming job cuts in a separate post. Here are the key takeaways from both statements:

• The move will affect workers across North America, Japan, Europe, APAC, and other SIE regions;
• Layoffs will be made across Naughty Dog, Insomniac Games, and Guerrilla Games, some of Sony’s most successful first-party studios, as well as Firesprite and some of the company’s technology, creative, and support teams;
• London Studio, known for making VR games for PlayStation, will be closed completely;
• Ryan said “timelines and procedures for how we approach this will vary based on your location due to local laws and regulations,” with Sony pledging to provide severance benefits and other support for those affected by the layoffs;
• After an internal evaluation, some projects in various stages of development will be canceled;
• According to Bloomberg, some of the canceled titles include an unannounced live service game based on the Twisted Metal franchise, which was in development at Firesprite. Jason Schreier also noted that Guerrilla Games will lay off 40 employees, or 10% of its staff.

Both executives cited the need for further growth as the main reason behind the company’s decision to initiate a restructuring. Ryan noted that SIE has to focus on its long-term sustainability, while Hulst said launching games on additional platforms such as PC and mobile “requires a different approach and different resources.”

Interestingly, Ryan announced the layoffs just one month before its upcoming retirement. On March 31, he will step down as CEO of SIE, with Sony Group president and COO Hiroki Totoki taking over as interim CEO of the company’s gaming division.

When announcing Q3 results, Totoki noted that PlayStation needs to better translate its creative work into growth to generate sustainable profits and higher margins. The latter has been a major concern for analysts, with some calling Sony’s declining gaming margins “extremely disappointing.”

This, combined with lower-than-expected sales of the PlayStation 5, recently wiped around $10 billion off the company’s market cap.