Sony to reduce headcount globally by 8%: Here's why
Sony has revealed plans to cut around 900 jobs from its PlayStation division, a global reduction of about 8%. PlayStation head Jim Ryan said, "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." This news comes as the gaming and tech industries face numerous job cuts throughout 2024.
London studio closure and Firesprite impact
The layoffs include shutting down Sony's London Studio, known for developing PlayStation VR games. Sony's Firesprite studio, the British team behind PlayStation VR's Horizon Call of the Mountain, will also be affected. Employees in the Americas, Japan, APAC (Asia Pacific), and EMEA (Europe, Middle East, and Africa) regions will feel the impact of these changes. Ryan explained that after much thought and leadership discussions, it was clear that changes were needed for the company's long-term sustainability.
Missed PS5 sales target and stock price drop
This announcement follows Sony's recent failure to meet its PS5 sales target, resulting in a $10 billion drop in stock price. Analysts note that while the PS5 outlook wasn't as expected, a near-decade-low games margin indicates that game production costs are hurting the company's earnings. The gaming industry has seen a wave of layoffs lately, with Microsoft cutting 1,900 Xbox and Activision Blizzard employees last month.
Unity and Discord layoffs
Other companies like Unity and Discord have also faced layoffs, with Unity cutting 25% of its workforce and Discord letting go of 17% of employees last month. The gaming industry has struggled with job cuts throughout 2023 and 2024. In an email to PlayStation employees, Ryan stressed the need for the company 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 urged employees to be resilient
In the memo to workers, Ryan outlined proposed changes, such as closing London Studio and reducing staff at Firesprite studio. He acknowledged the difficulty of these decisions and assured affected employees that they would receive support, including severance benefits. Ryan encouraged remaining employees to be resilient, sensitive, and adaptable during this tough time. He concluded by saying that while these are challenging times, they do not signify a lack of strength in the company, brand, or industry.
