Sony is Laying Off 900 Employees in its PlayStation Division

Sony announced this morning that it’s laying off 8% of its employees working in its PlayStation division, which represents about 900 people. The layoffs will impact several groups and PlayStation studios across the world.

In the US, Insomniac Games and Naughty Dog, two studios that delivered critically-acclaimed and commercially successful games in recent years will both be losing some employees. Sony’s Technology, Creative, and Support teams in the US will also be impacted by the layoffs.

In the UK and Europe, Sony will be laying off some employees at Guerrilla Games and Firesprite. The company will also shut down PlayStation Studio’s London studio, and Hermen Hulst, Head of PlayStation Studios, also confirmed that some games that were in development have been cancelled.

In an email sent to employees, Jim Ryan, President & CEO, Sony Interactive Entertainment explained that the company needs to make some drastic changes to adapt to an industry that has “changed immensely.” The exec, who will retire in March 2024, also added that these layoffs should help to ensure that Sony’s PlayStation division can continue to thrive in the future.

“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.”

These layoffs come after Sony sold fewer PS5 consoles than expected in the past quarter, and the company also lowered its PS5 sales estimate for the fiscal year by 4 million units to 21 million. If Sony expects PS5 hardware sales to gradually decline as the console is approaching the end of its lifecycle, the company also said in its latest financial report that it won’t be releasing any major first-party exclusives before the end of its next fiscal year in March 2025.

The video games industry has been hit by recurrent waves of layoffs in recent months. After completing its $68 billion acquisition of Activision Blizzard last fall, Microsoft also announced last month that it was laying off 1,900 employees in its gaming division.

To ensure the future growth of its Xbox business, Microsoft has also started experimenting with porting some of its recent exclusive games such as Sea of Thieves and Grounded to PlayStation and Nintendo consoles. While Sony still manages to sell millions of copies of its exclusive games like Marvel’s Spiderman 2 or God of War: Ragnarok, the company will likely accelerate the release of its first-party titles on PC to make the development of these blockbuster projects more sustainable.