Sony’s PlayStation London Studio shuttered in the wake of sweeping layoffs affecting around 900 employees worldwide, constituting approximately 8 percent of the PlayStation division’s workforce.
The repercussions of Sony’s decision resonate across various PlayStation studios, including industry heavyweights like Insomniac Games, Naughty Dog, Guerrilla Games, and Firesprite, adding to the ongoing wave of layoffs besieging the gaming and tech sectors throughout 2024.

PlayStation chief Jim Ryan conveyed the somber news, remarking, “We have made the extremely hard decision to announce our plan to commence a reduction of our overall headcount globally… Employees across the globe, including our studios, are impacted.”

Notably, the closure of London Studio, known for its contributions to PlayStation VR games, underscores the gravity of the situation.
Firesprite, the studio behind PlayStation VR’s Horizon Call of the Mountain, also finds itself among the casualties. Meanwhile, studios like Insomniac Games, Naughty Dog, and Guerrilla Games, spanning regions from the Americas to EMEA and APAC, face the fallout.

In an internal communication, Ryan emphasized the necessity of recalibrating the company’s trajectory for sustained growth and community-centric experiences, acknowledging the painful yet imperative nature of the decision.

The layoffs come in the wake of Sony’s shortfall in meeting PS5 sales targets, precipitating a staggering $10 billion plunge in the company’s stock value. Analysts attribute this shortfall, in part, to dwindling game margins, indicating mounting production costs as a significant factor.

Amid the upheaval, Sony’s pivot towards expanding PlayStation games onto PC and mobile platforms emerges as a strategic imperative. Hermen Hulst, head of PlayStation Studios, elucidates, “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.”

The gaming industry at large faces similar challenges, as evidenced by recent layoffs at Microsoft, Unity, and Discord, casting a shadow over the promising gaming landscape of 2023.

Quoted from Playstation’s chief Jim Ryan:

“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.

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”