Sony Group Corp (NYSE: SONY) recently announced a major restructuring that will result in approximately 900 layoffs, affecting about 8% of its global PlayStation workforce. Some of the key developers impacted by this decision include Insomniac, Naughty Dog, Guerrilla, and the closure of PlayStation’s London Studio.
The outgoing Sony Interactive Entertainment boss, Jim Ryan, explained in a blog post that this difficult decision was made to adapt to the changing industry landscape. He expressed gratitude towards the affected employees for their contributions but emphasized the need to prepare the business for the future.
Hermen Hulst, Head of PlayStation Studios, confirmed the impact on key developers and mentioned game cancellations resulting from a re-evaluation of projects. He mentioned that some projects will not move forward as the company evaluates its studios and portfolio.
These layoffs come at a challenging time for the gaming industry, with Microsoft Corp (NASDAQ: MSFT) also recently announcing substantial staff reductions following its acquisition of Activision Blizzard. Sony’s decision follows lower-than-expected PS5 sales during the crucial holiday quarter, prompting a revision of sales forecasts. Additionally, major PlayStation franchise releases have been delayed until after April 2025, including sequels to God of War and Spider-Man.
As the gaming industry continues to evolve, companies like Sony are facing the need to make tough decisions to remain competitive. The layoffs and restructuring at Sony highlight the challenges and changes happening in the gaming industry, as companies adapt to new market dynamics and consumer preferences.
