"We began running in the red": Bungie lays off 220 employees, forms new studio within PlayStation

Bungie is downsizing and restructuring its operations. The Destiny developer has decided to lay off 220 employees, or about 17% of its total workforce.

Marathon

Bungie announced the job cuts in a post on its official website, saying that the move “will affect every level of the company, including most of our executive and senior leader roles.”

CEO Pete Parsons cited “rising costs of development and industry shifts as well as enduring economic conditions” as the main reasons behind this decision.

In addition to laying off staff, the studio will also restructure its operations and deepen its connection with its parent company, Sony Interactive Entertainment (SIE):

• 155 employees will be integrated into SIE over the next few quarters — this will allow Bungie to save those roles;
• Bungie will spin off one of its unannounced projects, an action game set in a brand new science-fantasy universe, into a new studio formed within PlayStation specifically for it.

“I realize all of this is hard news, especially following the success we have seen with The Final Shape,” Parsons said in a statement. ”But as we’ve navigated the broader economic realities over the last year, and after exhausting all other mitigation options, this has become a necessary decision to refocus our studio and our business with more realistic goals and viable financials.”

Parsons called it a “time of tremendous change for our studio,” also trying to explain what led to the layoffs and restructuring:

• To deliver its ultimate goal of developing three global franchises, Bungie set up several incubation projects led by senior developers from its existing teams;
• At the same time, the studio continued working on its two main games, Destiny and Marathon;
• Bungie eventually realized that it couldn’t support expanding structures, with the new model stretching its talent “too thin, too quickly”;
• The studio’s rapid expansion took place in 2023, with Bungie facing several challenges: broad economic slowdown, its “quality miss” on Destiny 2: Lightfall, and the need to invest more time and resources into The Final Shape and Marathon.

“We were overly ambitious, our financial safety margins were subsequently exceeded, and we began running in the red,” Parsons concluded.

Right now, Bungie has over 850 developers working on Destiny and Marathon. The studio will now focus entirely on these two projects.