PlayStation Announces Layoffs, Impacting 900 Employees and Multiple Studios

The onslaught of layoffs in the gaming industry continues as Sony has announced an “organizational restructuring.” Soon-to-be-former President and CEO of Sony Interactive Entertainment, Jim Ryan, made the announcement today on a blog post. The plan is to reduce their global headcount by around 8% which is about 900 people. This change in organization affects studios including Insomniac Games, Naughty Dog, Guerrilla Games, and Firespite, and leads to the closure of PlayStation Studios’ London Studio.

In the blog post, Ryan shares the email that went out to the company informing the news. “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,” says Ryan. “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.” Those affected by the change in structure will receive support, including severance benefits.

As previously mentioned, this is another announcement of layoffs hot off the heels of Microsoft laying off 1900 employees just towards the end of January. Almost 7000 people have been laid off in the games industry so far in 2024, and February isn’t even over yet. The burning question that typically arises with news such as this is: why? The hack from Insomniac back in December revealed that Marvel’s Spider-Man 2 cost $300 million to make, compared to the $90 million it cost to make its successor, Marvel’s Spider-Man. Spider-Man 2 has also sold over 10 million copies, though, and if you somehow can’t turn a profit when you sell that many games, you’re making a mistake somewhere. Perhaps the problem is with the unsustainable size and scope of so-called “AAA” games these days?

When the Wii U was a commercial failure back in 2013, the late Satoru Iwata took a 50% pay cut to avoid layoffs entirely. (Granted, Japanese labor laws regulate layoffs more strictly than in other countries.)  There have been no reports of other gaming executives taking a similar cut, and in fact many continue to collect bonuses after laying off large swaths of employees. Layoffs are sure to continue throughout the year, unfortunate as that may be, which makes us want to once again share Jordan Mallory’s tweet from those simpler days of 2020:

i want shorter games with worse graphics made by people who are paid more to work less and i’m not kidding

— jordan 🇵🇸 (@Jordan_Mallory) June 29, 2020