Sony announces layoffs at PlayStation Studios, around 900 jobs being cut

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By Samuel Tolbert
published

Several hundred workers, amounting to around 8% of PlayStation's workforce, are being cut.

PlayStation Studios logo on black background
(Image credit: PlayStation)

What you need to know

  • Sony is laying off around 900 employees across PlayStation Studios, with multiple projects being canceled. 
  • This round of layoffs will see PlayStation's London Studio shut down. 
  • There are also significant cuts at Naughty Dog, Insomniac Games, and Firesprite. 
  • Sony Interactive Entertainment CEO Jim Ryan is leaving the company in March 2024.

Sony is the latest company to be laying off hundreds of employees from its gaming business. 

The news broke on Tuesday, with the company confirming that Sony Interactive Entertainment is laying off 900 people, or around 8% of the PlayStation workforce. As part of these cuts, PlayStation Studios is seeing a significant reduction, with London Studio being shut down. Naughty Dog, Insomniac Games, Guerrilla Games and Firesprite will also see cuts. 

Of the teams seeing layoffs, Naughty Dog is best known as the developer of the Uncharted and The Last of Us franchises. Insomniac Games has worked on franchises like Marvel's Spider-Man and Ratchet and Clank. Guerrilla Games is the developer of Horizon Zero Dawn and Horizon Forbidden West. Firesprite, brought into PlayStation Studios in 2021, has not yet released many games, but was responsible for co-developing Horizon Call of the Mountain with Guerrilla Games.

While PlayStation Studios is primarily known for developing console exclusive games for PlayStation hardware, the publisher has been expanding in recent years, bringing a number of PlayStation Studios games to Windows PC. Some of the best PC games available now include former PlayStation 5 and PlayStation 4 exclusives, with more games coming later this year like Horizon Forbidden West.

Jim Ryan's message to PlayStation workers

You can read Sony Interactive Entertainment CEO Jim Ryan's message to PlayStation employees below:

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:  

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.

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.  

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 

Ryan is slated to depart PlayStation in March 2024, having served as CEO at Sony Interactive Entertainment for the last few years.

What does this mean for PlayStation Studios?

Horizon Forbidden West is the next PlayStation game headed to PC. (Image credit: PlayStation Studios)

With this kind of reduction, some games are being cancelled. London Studio was working on a fantasy-themed live service title that had not yet been formally announced, and this game will now never see the light of day. Per a report from Bloomberg, Firesprite's rumored Twisted Metal live-service game has also been canceled, and the game was still fairly early in development.

Even outside of those two titles, I'd expect a reduction in the number of games that are launching, as this many teams having cuts will result in a knock-on effect. 

Part of the materials that were included in the Insomniac Games hack of December 2023 included comments from Insomniac lead Ted Price, who warned that if the studio suffered layoffs, the teams would be forced to cancel plans for a new Ratchet and Clank, as well as abandoning work on a new IP, in order to better support development for Marvel's Wolverine and other upcoming games. 

Analysis: What can I even say?

2023 wasn't great for layoffs, but 2024 has been utterly brutal. Hundreds at Riot Games. 1,900 at Microsoft Gaming. Thousands at Embracer Group across dozens of studios. Now almost a thousand at PlayStation. 

I wish this world valued the people who make games. I wish there were more repercussions for a successful business that decided to remove employees.

If anyone at PlayStation would like to talk about how they're feeling in regard to these layoffs, I'm all ears. 

Samuel Tolbert
Samuel Tolbert
Freelance Writer

Samuel Tolbert is a freelance writer covering gaming news, previews, reviews, interviews and different aspects of the gaming industry, specifically focusing on Xbox and PC gaming on Windows Central. You can find him on Twitter @SamuelTolbert.

2 Comments Comment from the forums
  • fatpunkslim
    Beyond the general trend in the video game industry. This is already the 2nd wave of layoffs for PlayStation and the studio closures are in addition to the other studios already closed by Playstation: London Studios, Pixelopus, Japan Studio, Liverpool Studio, Manchester Studio, etc.

    This is a problem that goes beyond the current trend and reveals a fundamental problem. They are paying for strategic errors and a lack of market anticipation, they have also lost 10 billion on the stock market following announcements of lower margins and failure to achieve objectives?

    Now the sudden change in strategy started by Jim Ryan towards more service games, more PC games and fewer AAA games is not reassuring for the market or for the players. Playstation is heading into an area that they have mastered poorly, just look at their PC ports, and the lack of AAA games which is their trademark is already being felt. Since the start of this generation of consoles, they have focused on hardware with first the PS5, the PSVR2 (which is clearly abandoned), the PS5 slim, the PS portal, headphones, accessories, etc... BUT they have released very few games from their internal studios apart from sequels and remakes, which ends up annoying fans.

    They compensate with temporary exclusives of third party games, but which for the most part do not compensate for the quality of first party games.

    Encouraged by the success of helldivers 2, they will continue on this path, more service games to the detriment of large single-player games. But service games are more the preserve of PC players and less of PlayStation console players, many of whom do not like this type of game.

    PlayStation console players have been neglected since the start of this generation and it's a safe bet that this isn't about to change with this new strategy.

    For comparison, in 2024 alone, Xbox is releasing more exclusive games from internal studios and some third-party exclusives like: Hellblade II, Stalker 2, Diablo IV, Avowed, Flight, Simulator 2024, Indiana Jones
    Flintlock, Towerborne
    Ara, Ark II, age of mythology. For its part, PlayStation will not release any first party games until March 2025 according to the CEO of Sony. The difference is striking.

    Xbox creates content (new games, new licenses, varied games for all tastes), while PlayStation sells consoles. I'm exaggerating the line a little but that's it.

    Fortunately Xbox sends small games like pentiment or old service games like sea of thieves (which is 6 years old) but it's not enough, Xbox will never send big system seller exclusive games like indiana jones, starfield, hellblade2, gears 6, fable, avowed, perfect dark, blade, etc....

    Honestly, as players on all consoles, my PS5 is gathering dust, I mainly play on Xbox series X + gamepass because there is always something new, first party or third party day one games.

    The future of the PlayStation seems really bad to me
    Reply
  • fjtorres5591
    Lumping Sony's problems in with the general wave of tech industry layoffs risks missing the point: their problems are self-inflicted and specific to their hardware centric business model. That is *not* where the bulk of layoffs elsewhere are coming from.

    There is a tendency to link Sony shutting their London VR studio and triming staff at their three biggest, highest profile studios with Microsoft's recent layoffs but the two are completely different situations.

    Microsoft just bought ABK and brought in 13,000 new employees and a poorly run organization that must now be brought in line with Microsoft operational practices, particularly in the business structures outside game development. In every single merger ever there have always been layoffs and reductions in support personnel. Plus, MS has *always* run annual staff evalations and quiet layoffs of "lower performers" at the beginning of the calendar year. That is not what Sony is doing.

    Likewise, Embracer is firing staff and closing studios left and right because their empire was practically a stock-driven Ponzi scheme.

    And then, there is the dirty secret of AAA gaming: it's a bubble with too many games chasing too few gaming time. During the pandemic there was both a shortage of product and an explosion of gaming because, well, there wasn't much else to do under lockdown and distancing. With many panned releases delayed, existing games and particularly live service gmes grew their engagement massively. Many companies figured the new, larger audience was a permanent boost and planned accordingly. They planned wrong.

    What we're seeing is the morning after that follows a wild night of bingeing.
    The piper demands payment.

    And if that wasn't bad enough, AI is here. And that is changing *everything*.

    For starters, the current hardware generation is going to be a short one; it is not built to deal with the games of 2028, much less 2030.

    Second, AI coding is here to stay. Grumble all you want but with AI tools the "lines of code per programmer" are going to explode. Higher productivity + flat markets means there will be *more* staff reductions.

    Third, AI software is very very good at testing and flagging bugs.

    Fourth, AI dynamic voice generation and AI NPCs will unquestionably reduce the need for voice actors. Grumble at will. It will still happen. The smarter actors will license their voices to servecas templates for the AI voice models.

    Fifth, procedural quests, dungeons, and enemies will be the order of the day. Replayability and customization will be the order of the day. No two playthoughs will be the same. Think in terms of a Halo Forge in every AAA game. One and done games are on their last legs in tbe AAA space as every game becomes a Bethesda-style sandbox timesink. Instead of coding specific encounters and chllenges, developers will lay down rules and guidelines and the game's internal "dungeon master" will dynamically assemble non-repeating challenges. Ditto for NPCs. Nowhere close to FREE GUY but definitely well above the "arrow in the knee" characters or combat hordes of today's games.

    Game development is going to be massively different. And cheaper.
    But it will be cheaper because it will need less staff to produce longer games, resulting in a tighter market requiring tighter budgets.

    You don't get there without a total restructuring over a decade or so.

    And as always, the first movers have the best chance to survive.

    And in this new era, "First mover" isn't Sony.

    One last thought: rumor says Sony is doing a PS5 PRO this year. If true, then that box was designed last year. Before AI hit the mainstream. If they go ahead with it, they will be stuck with that design for at least three years. That would not go well.

    The turmoil is just starting, folks.

    PS: Indies will do great. Because they're already budget conscious, flexible, and eager to adopt any and all cost saving/added capability tools. And have less to unlearn. It's not all bad news.
    Reply