Sony says it’s laying off around 900 employees of its PlayStation division, a reduction of its global headcount of around 8 percent. Sony’s layoffs will impact a variety of its PlayStation studios, including Insomniac Games, Naughty Dog, Guerrilla Games, and Firesprite. Sony’s layoffs are the latest in a wave that has been impacting the gaming and tech industries throughout 2024.

“We have made the extremely hard decision to announce our plan to commence a reduction of our overall headcount globally by about 8 percent or about 900 people, subject to local law and consultation processes,” says PlayStation chief Jim Ryan. “Employees across the globe, including our studios, are impacted.”

Several PlayStation studios are affected, with Sony closing its London Studio in the UK, which developed PlayStation VR games. Sony’s Firesprite studio, which is also impacted, is the British studio behind PlayStation VR’s Horizon Call of the Mountain game. Sony revealed last week that it’s working on PSVR 2 support for PC.

In a separate note, Hermen Hulst, head of PlayStation Studios, confirmed US-based studios like Insomniac Games and Naughty Dog are also affected, alongside Sony’s Guerrilla studio based in the Netherlands. Overall, employees across the Americas, Japan, and EMEA and APAC regions will be impacted.

“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,” says Ryan in an internal email to PlayStation employees. “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 layoffs come just days after Sony missed a PS5 sales target, which led to Sony’s stock price plummeting by $10 billion. While the PS5 outlook wasn’t what Sony was expecting, analysts also pointed toward a near decade low games margin — suggesting that the cost of making games is eating into Sony’s gaming margins.

Sony president Hiroki Totoki discussed the opportunity to grow PlayStation games on PC earlier this month, too, and it looks like Sony is throwing more resources at its PC and mobile effort. “Delivering and sustaining social, online experiences – allowing PlayStation gamers to explore our worlds in different ways – as well as launching games on additional devices such as PC and Mobile, requires a different approach and different resources,” says Hulst.

The game industry has been hit by waves of layoffs recently, and 2023’s great games were overshadowed by a dark cloud of layoffs. Microsoft laid off 1,900 Activision Blizzard and Xbox employees last month, around 8 percent of the overall Microsoft Gaming division. Unity also laid off 25 percent of its workforce last month, and Discord laid off 17 percent of its employees.

Here’s the full memo from Ryan:

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% 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 

Update February 27th, 8:40AM ET: Article updated with statements from Sony’s head of PlayStation Studios.