Another huge player in the video game industry has today (Feb.27) declared significant layoffs will be needed. Sony has announced they will be laying off 900 employees from PlayStation – around 8% of the console maker’s global workforce.
Major PlayStation development studios affected include Naughty Dog, Insomniac, and Guerrilla Games, Jim Ryan, Sony Entertainment’s CEO said in a statement on Tuesday. Additionally, Sony’s London Studio, focused on VR development, will be shut down completely. There will also be staff reductions at recently acquired studios Firesprite and Bungie.
Why is Sony making layoffs at PlayStation?
The sweeping job cuts come amid several challenges for PlayStation. While the PS5 console continues to sell very well, Sony is struggling with high game development costs and a lack of profitable live service titles. The cancellation of The Last of Us multiplayer spinoff after years of work also points to strategic struggles.
Explaining the decision Ryan said: “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. ”
Questions will arise about whether PlayStation management should have acted sooner to trim costs and better position studios for long-term success in a hit-driven business.
Many of Sony’s peers and competitors in the tech industry have been shedding staff for months.
In January, Microsoft laid off 1,900 staff across its gaming divisions, impacting employees at Activision Blizzard and Xbox and around 2,000 employees were due to be laid off by gaming software developer Unity. Amazon, Meta, Discord, YouTube, Google are just a handful of the tech companies that sacked a total of 31,007 employees in January alone with February seeing 12,950 lay offs so far, according to Layoffs.fyi.
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