By using this site, you agree to our Privacy Policy and our Terms of Use. Close
PlayStation Lays Off 900 Employees, London Studio Shut Down

PlayStation Lays Off 900 Employees, London Studio Shut Down - News

by William D'Angelo , posted on 01 March 2024 / 3,744 Views

Sony Interactive Entertainment announced it is laying off eight percent of its staff or about 900 employees. Studios in the US and Europe have been impacted by the layoffs.

London Studio has been entirely shut down, which was developing an online cooperative combat game for the PlayStation 5.

In the US, Insomniac Games, Naughty Dog, and Technology, Creative, and Support teams have been hit with layoffs. In Europe, Guerrilla Games and Firesprite have been hit with reductions. There are also some smaller layoffs at other teams at PlayStation Studios.

"The PlayStation community means everything to us, so I felt it was important to update you on a difficult day at our company," said Sony Interactive Entertainment president and CEO Jim Ryan. "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. Employees across the globe, including our studios, are impacted.  

"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."

Head of PlayStation Studios Herman Hulst added, " PlayStation 5 is in its fourth year, and we are at a stage where we need to step back and look at what our business needs. At the same time, our industry has experienced continuing and fundamental change which affects how we all create, and play, games. 

"Delivering the immersive, narrative-driven stories that PlayStation Studios is known for, at the quality bar that we aspire to, requires a re-evaluation of how we operate. 

Delivering and sustaining social, online experiences – allowing PlayStation gamers to explore our worlds in different ways – as well as launching games on additional devices such as PC and Mobile, requires a different approach and different resources. 

"To take on these challenges, PlayStation Studios had to grow. We have brought brilliant and successful Studios into our family. We have invested in new technology and partnerships. We have recruited talent from across our industry and beyond. 

"But growth itself is not an ambition. PlayStation Studios is committed to continually discovering ways to work together; collaborating and combining our efforts to ensure that we are able to craft games that push the boundaries of play and deliver what you expect from us.  

"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. 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."

Read the full email from Jim Ryan sent to employees below:

Email 

Subject: Important Update Regarding Organizational Restructuring 

Team, 

It is important to provide you with updates about the business as often as possible. Today, I am writing with sad news. 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, we have concluded that tough decisions have become inevitable. The leadership team and I made the incredibly difficult decision to restructure operations, which regrettably includes a reduction in our workforce impacting very talented individuals who have contributed to our success.  

After careful consideration and many leadership discussions over several months, it has become clear changes need to be made to continue to grow the business and develop the company. We had to step back, look at our business holistically, and move forward focusing on the long-term sustainability of the company and delivering the best experiences possible for our community. The goal is to streamline our resources to ensure our continued success and ability to deliver experiences gamers and creators have come to expect from us.  

I want to be as transparent as possible with you, our partners, and our community about what this means:  

    • We envision reducing our headcount by about 900 people, or about 8% of our current workforce 
    • There will be impact for employees across all SIE regions – Americas, EMEA, Japan, and APAC  
    • Several PlayStation Studios are affected 

I know that receiving this news will be hard and unsettling and you are wondering what this means for you. Timelines and procedures for how we approach this will vary based on your location due to local laws and regulations.

    • For those of you in the US, all impacted employees will be notified today.  
    • In the UK, it is proposed:  
      • That PlayStation Studios’ London Studio will close in its entirety;
      • That there will be reductions in Firesprite studio;  
      • And that there will be 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. All employees who are part of the collective consultation will be made aware of the next steps today.  

    • In Japan, we will implement a next career support program. Details will be communicated separately.  
    • In other countries, we will begin conversations with those who are potentially at risk or impacted as a result of this proposed course of action.  

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. 

Jim 


A life-long and avid gamer, William D'Angelo was first introduced to VGChartz in 2007. After years of supporting the site, he was brought on in 2010 as a junior analyst, working his way up to lead analyst in 2012 and taking over the hardware estimates in 2017. He has expanded his involvement in the gaming community by producing content on his own YouTube channel and Twitch channel. You can contact the author on Twitter @TrunksWD.


More Articles

57 Comments
Shadow1980 (on 27 February 2024)

Corporations are not your friends. Even if you like their products, big video game companies care about one thing and one thing only: delivering a profit to the shareholders. All other considerations are secondary. Crew expendable.

If they think the best way to pad profits for the quarter is sending thousands to the unemployment line, they'll do it in a heartbeat and won't lose a wink of sleep over it. I had a friend who busted his ass for Lowe's for years, working his way up to an assistant manager position, and then one day they decided it was profitable to axe him and many other employees. All that hard work and dedication meant absolutely nothing to corporate. He wasn't a person to them. He was just a small portion of a number on a balance sheet. It's the cold, calculated logic of the profit motive. Decency, morality, and even lives are not and cannot be part of the equation.

  • +10
Raijin94 Shadow1980 (on 27 February 2024)

This sounds horrible, but is true AF.

  • +2
KLAMarine Shadow1980 (on 27 February 2024)

I expect the same cut-throat behaviors out of video game clientele.

  • -1
The Fury (on 27 February 2024)

And it sadly continues. Gotta make those April end of year numbers look good when you are spending billions on companies to make zero games making rich people richer. Bravo industry.

  • +9
BraLoD (on 27 February 2024)

Such a huge number of people losing their jobs. So sad.

  • +6
aTokenYeti (on 27 February 2024)

Three things to say about this

Number 1, it should have been obvious when Sony’s CEO was talking about how margins weren’t good enough that something similar to this was going to happen.

Number 2, if you read through the statement today it is clear that we are closer than ever to PlayStation launching their first and second party titles day and date on PC.

And number 3, this has nothing to do with PlayStation’s sales performance. This is an industry wide trend of layoffs in response to poor economic conditions (the Yen in particular is doing very poorly on international markets). Shareholders want profitability restored and the fastest way to do that in the short term is layoffs

  • +4
G2ThaUNiT aTokenYeti (on 27 February 2024)

It definitely shows how PlayStation's "walled garden" just isn't as sustainable as it once was. It obviously is still working for the most part. PS is at an all-time high in revenue, but even with the PS5 being a huge success, massive hits in Spider-Man 2 and Helldivers 2 recently, and a huge system selling release in FF7 Rebirth coming out in a couple of days just isn't enough anymore. Especially when your games are costing in the range of $200-$300 million to make.

If this was 15-20 years ago, or even 10 years ago, Sony would be an all-time high with performances like this. Not to mention, Sony still has Rise of the Ronin in March and Stellar Blade in April. But, times have changed. I wouldn't be surprised if more changes happen when SIE's interim CEO takes over next month that may, unfortunately, lead to additional layoffs, if not additional studio closures. I'm surprised Media Molecule in particular made it through this. Hopefully it stays that way.

It's saddening to see the state of the gaming industry.

  • +6
Dulfite G2ThaUNiT (on 27 February 2024)

They need to realize they don't have to have groundbreaking graphics to have massive sales. Nintendo does this every single year.

  • +7
G2ThaUNiT Dulfite (on 27 February 2024)

True, but unfortunately that'll be a very painful pill to swallow for many, because that's what everyone who buys a PlayStation is used to and expects. PlayStation has long been about powerful consoles and cutting edge graphics. Nintendo hasn't had that mindset for nearly 20 years now. The GameCube was pretty powerful at the time that included graphical showcases like Metroid Prime that somehow also managed to run at 60fps, but the GameCube ended up being Nintendo's now second worst selling home console in their history.

  • +1
burninmylight G2ThaUNiT (on 27 February 2024)

I've been wondering when the console graphics and power arms race bubble is going to burst. It became clear that this path that the industry has been on since the PS360 days isn't sustainable. Just sucks that there has to be so many studio and individual casualties in the process.

  • +1
lansingone G2ThaUNiT (on 27 February 2024)

On the flip side of that. I have to wonder if it would be more damaging to break down the "walled garden" with multi platform release parity? Yes there's immediate profit from the larger install base, but it reduces the likelihood of keeping players inside their ecosystem. It's the same reason Apple doesn't release FaceTime, iMessage, and iCloud on Android. They're bait to get you inside their storefront where they get a cut of all sales.

  • +1
G2ThaUNiT lansingone (on 27 February 2024)

Yeah but FaceTime, iMessage, and iCloud aren't just available on iPhone. They're also on iPad, Mac (both laptop and all-in-one PCs) Apple TV, Apple Watch, Apple Vision Pro, and a couple other home products.

There's a lot of different products that support Apple's ecosystem. Not so much the case with PlayStation that is just a single device. Which is why they're spreading out to PC and Mobile. To what extent, that's still being figured out it seems.

  • +1
lansingone G2ThaUNiT (on 27 February 2024)

I think we might disagree on how important those services are to their ecosystem. That was my implication, all the devices you mentioned are locked into their ecosystem. The same way I think exclusive games are important to the PlayStation ecosystem.

  • +1
G2ThaUNiT lansingone (on 27 February 2024)

That's the thing though. PlayStation no longer has exclusives in the traditional sense. Timed console exclusives it seems now. As of right now, Sony has published 13, soon to be 14, first party games on PC and they've made it clear that will only continue. Is that part of the PlayStation ecosystem? Or what about their plans to release games on mobile? Neither of those things are part of actual PlayStation hardware, but they are part of the overarching PlayStation ecosystem. That was my point about how Apple has their services across multiple devices.

Having exclusives just on the PlayStation console these days would be equivalent of just having the aforementioned Apple services like iMessage or FaceTime only on iPhone. It's now all about how much does Sony want to tear down the walled garden.

  • 0
lansingone G2ThaUNiT (on 27 February 2024)

To be fair, I'm sure FaceTime and iMessage usage outside of iPhones is an exceedingly small percentage of usage. In fact that is a good point towards the business model Sony seems to currently employ. They release their games on PC after a indeterminate amount of time, so nobody is just marking their calendar and waiting, thus ensuring it will maximize sales on console before double dipping sales on PC. I don't think either of these companies would offer their respective "bait" on alternative platforms if it was going to eat into their big picture of getting people using their storefront.

  • 0
VAMatt aTokenYeti (on 27 February 2024)

The yen "doing poorly" against other currencies is a positive for a Japan based multinational company's profits.

For example, as the yen declines against the US dollar, each dollar converts to more yen. So Sony gets more yen for everything they sell when the yen is relatively weak.

  • 0
xMetroid (on 28 February 2024)

After having one of their best years of hardware mind you

  • +1
Azzanation (on 28 February 2024)

The console industry is stagnated. Its not growing.

Doesn't matter how much Hardware you sell or how much software you sell. If you arent beating your previous years, improving the value of stocks, pleasing shareholders and Investors and showing an increase overall. These things will always happen. The more you sell this gen, the more you need to sell next gen.

We have seenthe increase prices and software going to more places for this exact reason. Expect another price increase next gen if things continue to be the same.

  • +1
Qwark (on 27 February 2024)

It was to be expected, seems like Nintendo and Capcom are the only ones that might escape layoffs. For Sony this is the second round already though and Bungie also layed off people. That London studios would close was foreseeable, I fear Media Molecule is next.

  • 0
KrspaceT Qwark (on 27 February 2024)

Heck Nintendo gave their employees a raise a while back. Did Capcom do so too?

  • 0
Sogreblute KrspaceT (on 27 February 2024)

Most Japanese companies gave raises.

  • 0
Kneetos (on 27 February 2024)

Sadge

  • 0
LudicrousSpeed (on 28 February 2024)

But they just paid billions for Bungie

am I doing it right

  • -1
Hardstuck-Platinum LudicrousSpeed (on 28 February 2024)

Bungie helped Arrowhead with many aspects of Helldivers 2 so buying them has already been worth it

  • -2
Bandorr LudicrousSpeed (on 28 February 2024)

That was 2022. It's 2024.
So as usual - you aren't doing it correct.

  • +1
Panicradio (on 27 February 2024)

If profit margins were mostly suffering from regions other than HR costs, they should be ashamed of themselves.

  • -3
hellobion2 (on 27 February 2024)
  • -12
Hardstuck-Platinum (on 27 February 2024)
  • -17
Comment was deleted...