In a significant move, Sony Interactive Entertainment announced on Tuesday its decision to cut approximately 900 jobs at its PlayStation unit and close a studio in London. Microsoft also announced a set of layoffs.
This development comes amid the video game industry’s ongoing struggle to rebound from a post-pandemic downturn.
Sony’s layoffs, impacting about 8% of the division’s workforce across regions from the Americas to Asia, follow its recent reduction of annual sales expectations for the PlayStation 5 console.
Departing Sony Interactive Entertainment President and CEO Jim Ryan explained the decision in an email to employees, stating, “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.”
According to Sony, the layoffs will affect several PlayStation Studios, including prominent names such as Insomniac, responsible for “Spider-Man” Naughty Dog, the creator of “The Last of Us” and Guerrilla, known for “Horizon” according to a Bloomberg report.
These studios are considered among Sony’s most successful subsidiaries.
Microsoft, a stalwart in the industry, is also undergoing significant layoffs in its gaming division. The company will cut approximately 1,900 people, as revealed in a company memo.
This decision coincides with Blizzard president Mike Ybarra’s departure from the company. Microsoft Gaming CEO Phil Spencer noted in the memo seen by CNBC, that the layoffs aim to minimize “areas of overlap” and emphasized that they are indeed “painful.”
Microsoft will lay off roughly 1,900 people in its gaming division, according to a company memo.
In the memo, Microsoft Gaming CEO Phil Spencer said the layoffs were intended to minimize “areas of overlap.” – @CNBC https://t.co/WLcQkl1qbl
— NBC News (@NBCNews) January 26, 2024
This move follows Microsoft’s acquisition of video game giant Activision Blizzard, known for popular titles like Call of Duty and World of Warcraft, just over three months ago.
Adding to the industry’s turbulence, a trio of game developers, including New World Interactive, Saber Interactive, and Tinybuild, have recently announced layoffs.
Saber Interactive, the parent company of New World Interactive, is grappling with challenges, including mass layoffs and the potential sale of Gearbox Software. Indie publishing outfit Tinybuild cites cost restructuring for its layoffs.
Codemasters, Tinybuild & New World Interactive, a subsidiary of Embracer Group, just entered a new round of layoffs.
Yet another not so Merry Christmas for a couple of families I guess!? 😒https://t.co/57bAVHQe0i— simplyBratt (@simplyBratt_X) December 6, 2023
EA-owned Codemasters, a renowned racing game developer, has also issued layoffs, attributing them to “small-scale organizational changes.”
These industry-wide firings follow a string of bad news, including layoffs at Ubisoft Montreal, Epic Games, and CD Projekt Red earlier in the year, indicating ongoing challenges in the gaming sector.
