Sony has announced that it will be laying off around 900 employees from its PlayStation business, which equals around 8% of its total global workforce.
The layoffs will affect PlayStation Studios globally, however, it has been stated that PlayStation’s London Studios will be closed in its entirety but other studios will also be affected.
Sony of course recently unveiled that they were reducing the sale margins for the PS5 console, which resulted in the company’s stock price dropping by around $10 Billion. Hiroki Totoki, the new president of Sony, also stated the profit margins from exclusive game sales were also lower than expected and that they would be looking at aggressive expansion plans into the PC and cloud gaming markets.
You can see the full memo from Jim Ryan that was sent out to PlayStation employees below:
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
Jim Ryan – PlayStation
In a separate note from the head of PlayStation Studios, Herman Hulst, he states that affected studios will include Insomniac, Naughty Dog, Guarilla and Firesprite.
Today, Sony Interactive Entertainment initiated a reduction in our workforce – including within PlayStation Studios – and I wanted to talk about the impact that will have.
These decisions have been extremely difficult, but they are necessary, and I think it’s important to be transparent:
The US based studios and groups impacted by a reduction in workforce are:
- Insomniac Games, Naughty Dog, as well as our Technology, Creative, and Support teams
In UK and European based studios, it is proposed:
- That PlayStation Studios’ London Studio will close in its entirety;
- That there will be reductions in Guerrilla and Firesprite
These are in addition to some smaller reductions in other teams across PlayStation Studios.
Our goal at PlayStation Studios has always been to make the best games for PlayStation fans, and our global community of studios represent some of the most creative and talented teams within the gaming industry.
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.
I am deeply saddened to see talented individuals leave the company. I have so much admiration, appreciation and respect for their work.
PlayStation Studios will continue to be a creator-led organization driven by evolving our beloved franchises and bringing new gameplay experiences of the highest quality to our fans.
Thank you all for your continued support.
Herman Hulst – Head of PlayStation Studios
This sad news comes a little over a month after Microsoft announced around 1900 layoffs from the Xbox division, in a year that had already seen thousands of people lose their jobs in the gaming industry.
As always, our thoughts are with those impacted by these cuts and we hope that they will very quickly be able to seek new employment and stability.
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