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The video game sector continues to face a challenging period marked by ongoing layoffs. Sony has joined the ranks of companies reducing their workforce, announcing on Tuesday the dismissal of approximately 900 employees from its PlayStation division, which accounts for 8% of its global headcount.
The impact of the layoffs will be felt across several high-profile development teams within the Sony family. Notable studios that will be affected include Naughty Dog, creators of The Last of Us; Insomniac Games, the team behind the acclaimed Spider-Man series; and Guerilla. Additionally, layoffs will extend to Firesprite, Sony’s UK-based studio, as confirmed in an announcement from Jim Ryan, President and CEO of Sony Interactive Entertainment.
Sony announces they will be laying off 900 employees globally from their PlayStation workforce.
Sony’s Playstation London Studio is completely closing down in relation to the layoffs. pic.twitter.com/f7yk4nezEd
— Pop Base (@PopBase) February 27, 2024
The downsizing will have a global reach, with PlayStation teams worldwide facing job cuts, and it will result in the complete closure of Sony’s PlayStation studio in London.
Jim Ryan articulated the rationale behind these tough decisions, emphasizing the necessity for Sony to adapt to the rapidly evolving industry. In his words, “The industry has changed immensely, and we need to future ready ourselves to set the business up for what lies ahead.” Ryan highlights the imperative to meet the expectations of developers and gamers and to continue driving forward the technological advancements in gaming.
The rise of generative AI within the gaming industry may have implications for these layoffs, although Sony has not explicitly linked the two. The development of AI tools, such as the AI game development toolkit proposed by Microsoft, has been a contentious topic, stirring debate among game developers and in-game talent regarding the future of game creation.
Further expounding on the factors influencing the layoffs, Ryan pointed to the “evolving economic landscape” as a key driver in making these “inevitable” reductions. He acknowledged that Sony is reevaluating its approach to game development and launches but stopped short of providing detailed information.
Sony has pledged to offer “support” to those being laid off, which includes severance packages. Additionally, Ryan mentioned that employees in Japan will have access to a “next career support program,” aimed at assisting them in transitioning to new opportunities.
