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Massive Layoffs at PlayStation: 900 Jobs Cut Across Key Studios

ByHuey Yee Ong

Mar 1, 2024
Massive Layoffs at PlayStation: 900 Jobs Cut Across Key Studios

PlayStation has announced the layoff of approximately 900 employees, signaling a major restructuring within Sony Interactive Entertainment (SIE). This decision affects roughly 8% of the workforce in PlayStation’s division, underscoring a substantial shift in the company’s strategic direction. The layoffs span across several of PlayStation’s most celebrated studios, including Insomniac Games, known for their work on “Spider-Man” and “Ratchet & Clank”; Naughty Dog, the creative force behind “The Last of Us”; and Guerrilla Games, the developers of the “Horizon” series. These studios have been instrumental in crafting some of PlayStation’s cornerstone franchises, with “Marvel’s Spider-Man 2” notably achieving sales of 10 million units within its first three and a half months.

The restructuring extends beyond these prominent studios. Sony’s London Studio, previously engaged in developing a cooperative multiplayer game for the PlayStation 5, is slated for complete closure. Firesprite, another valued member of the PlayStation studio family, will experience staff reductions. Furthermore, the layoffs will not be limited to creative teams but will also impact the Technology, Creative, and Support departments within PlayStation, indicating a broad and deep-seated organizational recalibration.

PlayStation’s Approach to Layoffs

Affected employees within the United States are being notified of their status imminently, with Sony committed to adhering to local laws and regulations to facilitate layoffs in other regions. This global approach underscores the extensive impact of the restructuring, affecting PlayStation operations worldwide.

The decision for this drastic measure comes after months of contemplation and leadership discussions, aimed at evaluating the company’s strategic direction. Jim Ryan, the outgoing SIE president, and CEO, in communication with staff, highlighted the necessity of these layoffs for the continued growth and sustainability of the company. According to Ryan, this challenging decision was reached after a holistic assessment of the business, emphasizing the importance of focusing resources towards long-term company success and maintaining the high-quality experiences that PlayStation’s community expects.

Cancelled Projects and Future Plans

Hermen Hulst, head of PlayStation Studios, shared insights into the evaluation process that led to these layoffs. The review encompassed an assessment of the studio portfolio and development projects, leading to the unfortunate cancellation of several projects in varying stages of development. While specific details of all affected projects were not disclosed, it is confirmed that the undertaking at London Studio and an early development stage live-service “Twisted Metal” game at Firesprite are among those canceled. Hulst stressed that the decision to halt these projects reflects broader market and industry shifts, rather than the dedication or talent of the involved teams.

These layoffs and project cancellations occur amidst a strategic pivot at PlayStation, which is reassessing its famed focus on blockbuster single-player titles. The shift includes a balancing act between continuing to deliver narrative-driven experiences and expanding into the realm of long-tail multiplayer games. This strategic realignment also involves extending PlayStation’s reach beyond traditional consoles to include PC and mobile platforms, reflecting a broader industry trend towards cross-platform gaming experiences.

Broader Industry Layoffs

This restructuring announcement is part of a troubling trend of layoffs within the gaming industry, which has seen over 7,000 job losses this year alone, contributing to a total of more than 16,000 layoffs when combined with the previous year’s figures. Other major players in the industry, such as Microsoft, Riot Games, and Sega of America, have also undertaken significant layoffs, highlighting the industry’s current state of flux.

The layoffs at PlayStation, specifically, underline a period of introspection and recalibration within the gaming sector, as companies grapple with changing consumer preferences, technological advancements, and the economic challenges of producing high-quality, innovative gaming experiences. As PlayStation navigates through this restructuring, the gaming community awaits to see how these changes will shape the future of its beloved franchises and the overall landscape of the gaming industry.

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Featured Image courtesy of Bloomberg via Getty Images

Huey Yee Ong

Hello, from one tech geek to another. Not your beloved TechCrunch writer, but a writer with an avid interest in the fast-paced tech scenes and all the latest tech mojo. I bring with me a unique take towards tech with a honed applied psychology perspective to make tech news digestible. In other words, I deliver tech news that is easy to read.