Sony
is laying off approximately 900
employees
from its
PlayStation
division, representing around 8% of the unit's global workforce.
In an email to staff, PlayStation President and CEO
Jim Ryan
called it an "extremely hard decision" made after "careful consideration and many leadership discussions over several months." Ryan said the
layoffs
aim to "streamline resources" and position the company for "long-term sustainability."
"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," Ryan wrote.
The job cuts will impact employees across all regions where PlayStation operates. Entire studios are being shuttered, including PlayStation's
London studio
, which focuses on VR games.
PlayStation Studios taking the brunt of layoffs
Layoffs will significantly impact PlayStation's game development studios. Hermen Hulst, Head of PlayStation Studios, confirmed in a separate statement that major studios like
Naughty Dog
, Insomniac Games, and Guerrilla Games will be affected.
"Across our studios, support teams throughout PlayStation and interactive entertainment, reductions will take place," Hulst wrote. "The proposed changes will mean we will part ways with valued colleagues across PS Studios."
Jim in an email to staff said that all employees involved will be notified of next steps today, and the affected employees will be provided severance benefits. Japan will have a new career support program, with details communicated later.
Specific details on which titles or franchises will be scaled back as a result of the layoffs remain unclear. However, Sony is expected to shift resources away from legacy single-player franchises and toward multiplayer experiences that drive recurring revenue through microtransactions and live services.
PS5 sales miss targets
The job cuts come a few days after Sony’s quarterly earnings call, where the PlayStation maker reported slower-than-expected adoption of the PlayStation 5 console. Sony has slashed its PS5 sales forecast for the year from 25 million units down to just 21 million.
The reduction indicates PlayStation 5 demand is evaporating faster than Sony projected. It also reveals supply chain constraints are finally easing, with Sony able to fulfil more demand if players were still lined up to buy the console.
With PS5 sales lagging internal targets, analysts believe Sony is restructuring to reduce costs and shift its gaming business to be less reliant on hardware revenue.
Sony is expected to release an updated PS5 Pro console later this year, which analysts suggests could help the company boost the sales.
Last year, Playstation laid off staff from a number of their studios, including 100 employees from Bungie, workers from Naughty Dog, and 15-20% of staff at Dreams and LittleBigPlanet studio Media Molecule.
The recent layoffs at PlayStation follow the wave of job cuts across the gaming studios. Sony's gaming rival Microsoft announced in January that it would cut roughly 1,900 jobs, with the axe falling largely on its Activision Blizzard business. Sony's competitor, Nintendo, has not laid off employees and instead has relied on attrition to reduce headcount.
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