PlayStation Feels Industry Pressure: Sony Cuts 900 Jobs, Shuts Down London Studio

Sony Group Corp SONY has announced a major restructuring, resulting in layoffs affecting approximately 900 employees, or about 8% of its global PlayStation workforce.

Specifically, Spider-Man developer Insomniac, The Last of Us developer Naughty Dog, and Horizon developer Guerrilla are affected, as well as PlayStation's London Studio, which will close entirely.

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Outgoing Sony Interactive Entertainment boss Jim Ryan said in a blog post: "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."

Ryan also emphasized the gratitude towards the affected employees, acknowledging their contributions, but highlighted the need to adapt to the changing industry landscape, saying: "The industry has changed immensely, and we need to future ready ourselves to set the business up for what lies ahead."

In a separate blog post, Hermen Hulst, Head of PlayStation Studios, confirmed the impact on key developers and mentioned game cancellations resulting from a re-evaluation of projects.

He said: "We looked at our studios and our portfolio, evaluating projects in various stages of development, and have decided that some of those projects will not move forward."

"Our philosophy has always been to allow creative experimentation. Sometimes, great ideas don’t become great games. Sometimes, a project is started with the best intentions before shifts within the market or industry result in a change of plan," Hulst added.

The layoffs coincide with challenges in the gaming industry, highlighted by Microsoft Corp's MSFT recent substantial staff reduction following its acquisition of Activision Blizzard.

Sony's decision comes amid lower-than-expected PS5 sales during the crucial holiday quarter, prompting a revision of sales forecasts. Additionally, Sony announced a delay in major PlayStation franchise releases until after April 2025, including sequels to God of War and Spider-Man.

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Image credits: Konektus Photo on Shutterstock.