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Sony lays off 900 people in PlayStation division

The entertainment and electronics company will also close PlayStation's London Studio.

The entertainment and electronics company will also close PlayStation's London Studio.

A pair of PlayStation 5 gaming consoles. (Photo courtesy Sony Interactive)
A pair of PlayStation 5 gaming consoles. (Photo courtesy Sony Interactive)

Sony is laying off around 900 people in its PlayStation gaming division, the company affirmed on Tuesday.

The job cuts represent around 8 percent of Sony’s workforce who are focused on Sony’s gaming business, and come about one month after Sony’s chief gaming rival Microsoft announced it was laying off nearly 2,000 people from Activision-Blizzard.

Jim Ryan, the CEO of Sony Interactive Entertainment, characterized the layoffs as “sad news,” but said the company “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,” Ryan said in a memo to employees. He intends to step down from the CEO role in March.

Ryan said the layoffs and the broader restructuring were necessary to meet certain challenges associated with an “evolving economic landscape” for gaming, including “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.”

“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,” Ryan said. “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.”

Ryan affirmed the layoffs will affect Sony’s gaming business throughout the world, with employee reductions slated for the United States, Europe, the Middle East, Africa, Japan and the broader Asia-Pacific region. Affected employees in the United States were being notified on Tuesday, Ryan said.

“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,” Ryan proclaimed.

Several PlayStation studios will be impacted by the reduction, and Sony’s London Studio will close completely. The London Studio was responsible for developing several virtual reality-based titles for Sony, including its first-person shooter “Blood & Truth” and “PlayStation VR Worlds.”

In a statement, Ryan said the changes were painful, but necessary because “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,” Ryan affirmed.

More than 50 million gamers around the world have purchased one of Sony’s newest PlayStation 5 consoles since it debuted more than three years ago, the company said in December. But, like other gaming companies, Sony has been impacted by a global decline in hardware and title sales over the past few years: In 2022, the gaming division declined more than 5 percent, according to Reuters. Last year, it rebounded just 0.6 percent, Reuters reported, which wasn’t enough to fully offset the prior year’s loss.

The full memo as sent by Sony Interactive Entertainment CEO Jim Ryan is 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:  

  • We envision reducing our headcount by about 900 people, or about 8 percent 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 

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About the Author:

Matthew Keys

Matthew Keys is a nationally-recognized, award-winning journalist who has covered the business of media, technology, radio and television for more than 10 years. He is the publisher of The Desk and contributes to Know Techie, Digital Content Next and StreamTV Insider. He previously worked for Thomson Reuters, the Walt Disney Company, McNaughton Newspapers and Tribune Broadcasting.
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