SIE is laying off 900 people, London Studio closing down entirely

[Joseki]

Source: https://sonyinteractive.com/en/news/blog/difficult-news-about-our-workforce/?sf271923331=1

The PlayStation community means everything to us, so I felt it was important to update you on a difficult day at our company. We have made the extremely hard decision to announce our plan to commence a reduction of our overall headcount globally by about 8% or about 900 people, subject to local law and consultation processes. Employees across the globe, including our studios, are impacted.

These are incredibly talented people who have been part of our success, and we are very grateful for their contributions. However, 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.

Below I’ve shared a copy of the email I sent out to the company this morning to provide more context on our thinking. We deeply appreciate support and understanding from the PlayStation community as these decisions are very difficult. Please rest assured that our plans for reorganizing and streamlining are so we can continue to deliver the best gaming experiences possible.

Email

Subject: Important Update Regarding Organizational Restructuring

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.

I 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

 

[derby_440]

"I 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. "

Difficult News About Our Workforce

The PlayStation community means everything to us, so I felt it was important to update you on a difficult day at our company. We have made the extremely hard decision to announce our plan to commence a reduction of our overall headcount globally by about 8% or about 900 people, subject to local...

sonyinteractive.com

 

[Astrogamer]

Jeez. Combined with all their layoffs last year (Bungie, Media Molecule, Sony VASG, the shuttering of Pixelopus), it's almost as bad as Xbox's layoffs.

 

[Vena]

Merged your duplicate threads. Joseki wins by being first.

 

[derby_440]

London studio who were making GAAS game got closed. So thats 2 GAAS cancelled in few months out of 12 announced back in 2021.

 

[Vena]

This was predicted after the financial results and what the CEO said at the time.

The whole GAAS venture for Sony seems to have been quite a mess.

 

[BassForever]

Jeez. Combined with all their layoffs last year (Bungie, Media Molecule, Sony VASG, the shuttering of Pixelopus), it's almost as bad as Xbox's layoffs.

Odds are these won't be the last layoffs for MS or Sony this year.

 

[Joseki]

I think everyone here expected massive layoffs before the end of the fiscal year but it obviously sucks.
Also RIP to London Studio.

 

[master94ga]

Jeez. Combined with all their layoffs last year (Bungie, Media Molecule, Sony VASG, the shuttering of Pixelopus), it's almost as bad as Xbox's layoffs.

Actually is worse that Microsoft in percentage.

 

[derby_440]

Layoffs at Insomniac Games, Naughty Dog, Guerilla etc

"These decisions have been extremely difficult, but they are necessary, and I think it’s important to be transparent:

The US based studios and groups impacted by a reduction in workforce are:

• Insomniac Games, Naughty Dog, as well as our Technology, Creative, and Support teams

In UK and European based studios, it is proposed:

• That PlayStation Studios’ London Studio will close in its entirety;
• That there will be reductions in Guerrilla and Firesprite

These are in addition to some smaller reductions in other teams across PlayStation Studios. "

 

[Vena]

Layoffs at Insomniac Games, Naughty Dog, Guerilla etc

"These decisions have been extremely difficult, but they are necessary, and I think it’s important to be transparent:

The US based studios and groups impacted by a reduction in workforce are:

• Insomniac Games, Naughty Dog, as well as our Technology, Creative, and Support teams

In UK and European based studios, it is proposed:

• That PlayStation Studios’ London Studio will close in its entirety;
• That there will be reductions in Guerrilla and Firesprite

These are in addition to some smaller reductions in other teams across PlayStation Studios. "

The ND layoffs likely have to do with the LoU GAAS thing they were working on, right?

 

[Bernd Lauert]

Jeez. Combined with all their layoffs last year (Bungie, Media Molecule, Sony VASG, the shuttering of Pixelopus), it's almost as bad as Xbox's layoffs.

If we look at the layoffs as percentages of the entire workforce, they are both very similar. Roughly 10% of the workforce if we count everything.

 

[Evilms]

An Important Update from PlayStation Studios

Today, Sony Interactive Entertainment initiated a reduction in our workforce – including within PlayStation Studios – and I wanted to talk about the impact that will have. These decisions have been extremely difficult, but they are necessary, and I think it’s important to be transparent: The...

sonyinteractive.com

 

[Evilnemesis8]

The ND layoffs likely have to do with the LoU GAAS thing they were working on, right?

Most likely positions that could not be retrained or put to the other two SP games they were working on for sure, but I wouldn't be surprised if they did cut some other jobs as well.

I'm looking at:

We looked at our studios and our portfolio, evaluating projects in various stages of development, and have decided that some of those projects will not move forward.

Looks like it won't be long until we know which projects got cancelled.

 

[Kirby]

It's people being fired, not percentages.

That said, unless they only fired people working on games meant to be cancelled, they're only going to hurt the studios and their output. It's likely going to be both.

 

[Kiria]

Both gaas and push for ps vr are terrible misteps by jim. Wouldn’t be surprised if he really got force to retire

 

[Godzilla]

I like how the conversation went straight to what % of workforce instead of the firing and state of the gaming industry.

But don't worry, your favorite CEO will still get it's yearly bonuses.

 

[Evilnemesis8]

It's people being fired, not percentages.
That said, unless they only fired people working on games meant to be cancelled, they're only going to hurt the studios and their output. It's likely going to be both.

Hitting Insomniac is wild considering their output this gen.

I'm looking at the blogspot saying reduction at Guerilla Games and I can't help but wonder what's going on with their MP game. Same with Firesprite, they're working on more than one project at the moment.

 

[derby_440]

Most likely positions that could not be retrained or put to the other two SP games they were working on for sure, but I wouldn't be surprised if they did cut some other jobs as well.

I'm looking at:



Looks like it won't be long until we know which projects got cancelled.

From Insomniac leaks we know their next IP and Ratched game will be affected by layoff. Maybe both got cancelled. Insomniac will only work on Spider-man and X-men for a decade.

 

[Bernd Lauert]

I like how the conversation went straight to what % of workforce instead of the firing and state of the gaming industry.

We discussed this in the Xbox thread already, to be fair. As a business, gaming has been stagnant and has missed the covid-induced growth predictions by a country mile. This is why layoffs are happening industry wide. Capitalism giveth (massive jobs expansion during Covid) and capitalism taketh away (now).

 

[Joseki]

I like how the conversation went straight to what % of workforce instead of the firing and state of the gaming industry.

First address the shareholders, then address the people being laid off.

 

[Lelouch0612]

The whole situation sucks, we knew it was coming given the Insomniac leaks and given the current margins.

Curious to see where they will go from here, I am sure employee morale will be affected greatly.

 

[enpleinjour]

Jeez. Combined with all their layoffs last year (Bungie, Media Molecule, Sony VASG, the shuttering of Pixelopus), it's almost as bad as Xbox's layoffs.

In terms of people laid off its nowhere close.

MSFT is at 3000 since 2022, worse than Embracer and on par with Unity.

Sony has now hit 1000+.

In terms of % (kinda hard since at each layoff the size of the company is different, but if we were to take it as peak vs now, I have):

Layoffs since 2022 %:

• Twitch - 35%
• Perfect World - 25%
• Unity - 25-30%
• Niantic - 20%
• Bytedance - 20%
• Epic - 16%
• Playtika - 15%
• Sea ltd - 15%
• MSFT - 13%
• Riot - 11%
• Embracer - 10-12%
• EA - 12%
• SIE - 9.5%

Layoffs since 2022 in dev count so far I have:

• MSFT - 3000
• Unity - 3000
• Embracer - 1500
• EA - 1300
• Amazon - 1300
• SIE - 1100
• Perfect World - 1000
• Epic - 830
• Riot - 530

 

[Lelouch0612]

In terms of people laid off its nowhere close.

MSFT is at 3000 since 2022, worse than Embracer and on par with Unity.

Sony has now hit 1000+.

In terms of % (kinda hard since at each layoff the size of the company is different, but if we were to take it as peak vs now, I have):

Layoffs since 2022 %:

• Twitch - 35%
• Perfect World - 25%
• Unity - 25-30%
• Niantic - 20%
• Bytedance - 20%
• Epic - 16%
• Playtika - 15%
• Sea ltd - 15%
• MSFT - 13%
• Riot - 11%
• Embracer - 10-12%
• EA - 12%
• SIE - 9.5%

Layoffs since 2022 in dev count so far I have:

• MSFT - 3000
• Unity - 3000
• Embracer - 1500
• EA - 1300
• Amazon - 1300
• SIE - 1100
• Perfect World - 1000
• Epic - 830
• Riot - 530

We are not going down the path of finding out who had the best worse layoff plan please.

 

[unkindlynice]

Rolling layoffs are never a good sign for strategy (and certainly not morale) - I suspect the GAAS will be the main victims of this but I don’t believe the cut offs are specifically to cut back on any specific product. More likely SIE is trying to increase margins in the longer term and cut back on staff numbers more generally.

If SIE are not making the margins they want on their games then people need to prepare for less output especially as MS increases their output on PlayStation.

 

[Ptsousa]

Unfortunately, the employees usually get the short stick in this situation...

I wonder what measures Totoki will also implement to cut development costs other than layoffs.

 

[Tokuiten]

Best-selling console of all time

These layoffs

This industry is sick. No argument will make this fluctuation "okay". I hope the people that celebrated PS5 being sold out for 2 years will rethink their stance on the matter, myopic success means nothing if this is the end result. I have to admit that I was quite frustrated with how slowly Nintendo grows their staff, but now it proves to be the infinitely more healthy approach in the longterm.

Man, these layoffs recently are so massive, if these people got together they could found their own publishing/development company ...

 

[Evilnemesis8]

Man, these layoffs recently are so massive, if these people got together they could found their own publishing/development company ...

With who's money?

 

[SoonyXboneUhh]

This was predicted after the financial results and what the CEO said at the time.

The whole GAAS venture for Sony seems to have been quite a mess.

It's a "stupid business model" if it relies on getting lucky.
50% of the biggest GAAS games were lucky hits. Add GTA, CoD and Sports games on the other 50% side.

 

[adriandlte]

I mean, it makes sense. Sony is probably thinking that they could release half the first-party games they are releasing now and still sell around as many consoles anyway. Layoffs and studio closures are obvious ways to increase profitability when you take that into account.

 

[Liha]

Look who visited the London studio last week. There is absolutely no chance that he didn’t know what was going to happen



Our output is weak, what should we do? Right let’s fire more developers so that our output remains weak.


Meanwhile at Nintendo:
-

 

[Pancracio17]

Overhiring in covid seems to be industry wide. Its rarer to see a publisher escape it. There should probably be some law to prevent mass hiring and subsequent laying off.

 

[unkindlynice]

Our output is weak, what should we do? Right let’s fire more developers so that our output remains weak.

Sonys financial issues are not about output. It’s about margins.

 

[Evilnemesis8]

The whole GAAS venture for Sony seems to have been quite a mess.

The whole experiment of studios having a main SP team and trying to do GaaS on the side seem to have ended.
Not surprising, very few studios can manage to satisfy the type of content cadence that GaaS requires AND also do other projects.

The only notable studio that I can think on the top of my head which has managed that in recent times is Respawn and that's with the caveat that both Star Wars Jedi games released in poor technical state at launch.

 

[Undead Warrior]

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.

lol

lmao

Good thing Sony has all those GAAS games to rely on for steady reven-- oh wait.

 

[Aostia82]

We are not going down the path of finding out who had the best worse layoff plan please.

yeah
this news sucks for so many employees, hope the best for them, no matter what!

 

[MegaXZero]

Awful news but not surprising as we knew it was coming based on the hack and Totoki’s comments. But damn learning about layoffs through a hack just sucks so much.

 

[seb]

We knew it was coming, still sad to see. Hope everyone can land on their feet. The decision of sending London Studio to work on a Heroes based MP instead of VR content for the new headset was always baffling to me. Even if PSVR2 future is cloudy, at least they had the experience to deliver something meaningful there vs competing in a absolutely crowded space.

 

[fiendcode]

Really sad to see London go. SIE's habit of closing their oldest studios will never sit right imo.

I'm surprised Media Molecule escaped the cull though I should probably keep an eye on twitter to make sure.

 

[KtSlime]

This is one of those things where the company fires, not because they couldn't afford to keep them, but to show their investors they are "fiscally responsible" and encourage the investors to invest more, right?

 

[Whats a Gyme]

Fucking terrible.

This is one of those things where the company fires, not because they couldn't afford to keep them, but to show their investors they are "fiscally responsible" and encourage the investors to invest more, right?

Seems so. Losing $10bil in market value/stock value due to missing your target and low profit margins do not sit right with investors, at all. Thus firing people, cutting costs, and cancelling projects helps, cause now your margins will go back up.

 

[BoktaiFan]

I'm surprised Media Molecule escaped the cull though I should probably keep an eye on twitter to make sure.

They had layoffs earlier right? How many people are left at MM anyway?

 

[Jimmy Joe]

Jason Schreier:

NEW: As part of today's mass layoff, Sony has canceled a Twisted Metal live-service game that was in development at UK-based studio Firesprite, Bloomberg has learned. Firesprite will also lay off an unspecified number of people.

Sony Cuts 900 Jobs in Gaming, Shuts Down a London Division

The company is also canceling a game based on the Twisted Metal racing franchise

www.bloomberg.com

More capitalist charnel house bullshit

God, I'm tired

 

[GodlyTrident]

Meanwhile at Nintendo:

Well, to be fair I don't think Nintendo is hiring that much at all + most of the workforce in Japan with ... kinda different working culture.

So I guess the London Studio was the one that supposed to be closed according to the Insomniac leaks?

 

[derby_440]

Jason Schreier:

Sony Cuts 900 Jobs in Gaming, Shuts Down a London Division

The company is also canceling a game based on the Twisted Metal racing franchise

www.bloomberg.com

More capitalist charnel house bullshit

God, I'm tired

With that 3 GAAS cancelled out of 12 announced.

Edit: Deviation game was likely also included in 12 so thats 4 out of 12 confirmed cancelled.

 

[Whats a Gyme]

Jason Schreier:

Sony Cuts 900 Jobs in Gaming, Shuts Down a London Division

The company is also canceling a game based on the Twisted Metal racing franchise

www.bloomberg.com

More capitalist charnel house bullshit

God, I'm tired

It's possible a lot of the layoffs are due to live-service issues/cancellations. Naughty Dog, London Studio, Insomniac, Guerilla, Firesprite were working on live-service games.

 

[SinCityAssassin]

In terms of people laid off its nowhere close.

MSFT is at 3000 since 2022, worse than Embracer and on par with Unity.

Sony has now hit 1000+.

In terms of % (kinda hard since at each layoff the size of the company is different, but if we were to take it as peak vs now, I have):

Layoffs since 2022 %:

• Twitch - 35%
• Perfect World - 25%
• Unity - 25-30%
• Niantic - 20%
• Bytedance - 20%
• Epic - 16%
• Playtika - 15%
• Sea ltd - 15%
• MSFT - 13%
• Riot - 11%
• Embracer - 10-12%
• EA - 12%
• SIE - 9.5%

Layoffs since 2022 in dev count so far I have:

• MSFT - 3000
• Unity - 3000
• Embracer - 1500
• EA - 1300
• Amazon - 1300
• SIE - 1100
• Perfect World - 1000
• Epic - 830
• Riot - 530

Were you seriously trying to spin this as a "this is relatively fine" scenario like you did with the whole SIE profit margins thing?

 

[Evilnemesis8]

The Twisted Metal GaaS game was the project I had the least amount of confidence in.
The Car Combat genre has been effectively dead for a LONG time now.
I can only imagine the trouble of the studio(s) working on this game in figuring out the audience and how to best reach time for this game.

 

[Tokuiten]

Well, to be fair I don't think Nintendo is hiring that much at all + most of the workforce in Japan with ... kinda different working culture.

So I guess the London Studio was the one that supposed to be closed according to the Insomniac leaks?

That's the point. Having a healthy staff recruitment leads to less layoffs.

 

[unkindlynice]

Seems so. Losing $10bil in market value/stock value due to missing your target and low profit margins do not sit right with investors, at all. Thus firing people, cutting costs, and cancelling projects helps, cause now your margins will go back up.

Sadly how business is. What I do get angry at is the lack of long term planning vs short term pumping the stock.

Clearly their margins should have been predictable; but they’ve tried to keep their valuation up with a bet on GAAS. This is why I think rolling cuts are so demoralising. Everyone knows now their long term thinking is flawed and that means they could need to make further cuts.