Sony has announced mass layoffs across PlayStation Studios with 8% or around 900 people set to be made redundant across their worldwide studios. This will include the complete shutdown of London Studio, while Naughty Dog, Insomniac and other studios are affected as well.
In the US, Sony is notifying affected employees today across Insomniac Games, Naughty Dog, as well as our Technology, Creative, and Support teams. In the UK and Europe where there’s better worker protection laws, Sony are proposing that PlayStation Studios’ London Studio will close in its entirety, and that there will be reductions in Guerrilla and Firesprite. These will be subject to the local laws and necessary consultation periods.
Outgoing SIE President and CEO Jim Ryan made the announcements in a blog post, sharing the internal email sent to all employees, where he said:
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.
A parallel post by PlayStation Studios boss Hermen Hulst explained:
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.
To take on these challenges, PlayStation Studios had to grow. We have brought brilliant and successful Studios into our family. We have invested in new technology and partnerships. We have recruited talent from across our industry and beyond.
But growth itself is not an ambition. PlayStation Studios is committed to continually discovering ways to work together; collaborating and combining our efforts to ensure that we are able to craft games that push the boundaries of play and deliver what you expect from us.
This is another gut punch to the games industry, which has seen company after company lay off employees, coming after years of rampant spending and studio acquisitions. We’ve seen huge numbers of employees being let go across Embracer’s spider-like network of publishers and developers, Microsoft laid off close to 2,000 employees following the acquisition of Activision Blizzard, there’s been studio closures, and more. It’s been an absolutely brutal year and a half for the industry at large.
For Sony, this move was somewhat expected after recent statements by Sony Group President Hiroki Totoki, who will be interim Chairman after Ryan’s departure. Despite being hugely successful in selling PlayStation 5 consoles, it feels like there’s been real difficulties in maintaining the company’s overall output of marquee single player adventures, as well as following the plan to release a wash of new live service games.
It’s a bit surprising to see Insomniac named here, given how they’ve released three games this generation where many other first party studios have managed none, but there is some cold logic that can be traced elsewhere. Naughty Dog’s The Last of Us multiplayer game was cancelled at the end of last year, while Firesprite was acquired in 2021 and put their VR game expertise to use with Horizon: Call of the Mountain – it’s reported that the layoffs are tied to the cancellation of a Twisted Metal game.
It’s sad to see London Studio go, given how important they were for Sony back in the day in leading the way for EyeToy, PS Move, the original PSVR and the SingStar series, but it feels like a similar situation to Japan Studio’s closure, and 2012’s Studio Liverpool before it. In 2022 a fantasy online co-op game was announced, but again, live services have seemingly been difficult for Sony to get off the ground, having previously delayed half of these games. It’s likely that some more games have now been outright cancelled, and that this is a significant factor in the layoffs and closures.
