PlayStation cuts 900 jobs - ‘the industry has changed immensely’ says PS5 boss

The video games industry is not doing well (Picture: Sony)

Sony has confirmed that it is laying off 8% of its entire workforce, with Insomniac, Naughty Dog, and Guerilla Games all affected.

It seemed inevitable, especially after leaked information of job cuts looming at Spider-Man 2 developer Insomniac Games, but Sony has now confirmed that it is planning massive layoffs across all its PlayStation studios.

Everyone seems to be affected, including not just Insomniac but also The Last Of Us maker Naughty Dog, Horizon developer Guerrilla Games, and the recently purchased Firesprite. London Studio, responsible for everything from VR game Blood & Truth to SingStar, will be shut down entirely.

It’s not clear how many will be going from which studios, but information from the Insomniac hacks last year suggested a target of 50 to 75 people, out of roughly 400.

The news was first rumoured earlier in the day, forcing Sony to officially announce a ‘reduction in its global workforce’.

The move follows similar moves from almost every other Western video games company, with Xbox laying off 1,900 people in January, Epic Games cutting 870 jobs, and Riot Games making more than 500 staff redundant.

Due in part to local labour laws, Japanese publishers have so far been largely unaffected, but the PlayStation business is run from the US, both from a legal perspective and in terms of its business approach.

‘The PlayStation community means everything to us, so I felt it was important to update you on a difficult day at our company,’ wrote Sony Interactive Entertainment president and SEO Jim Ryan, who is set to retire next month.

‘These are incredibly talented people who have been part of our success, and we are very grateful for their contributions. However, 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.’

It’s still not known who will take over after Jim Ryan leaves (Picture: YouTube)

As you can see, there’s no detail and he doesn’t try to explain in what way he feels the industry has changed immensely and why.

However, a copy of the email he sent to employees, replicated on the Sony Interactive Entertainment website, talks about an ‘evolving economic landscape’ and ‘changes in the way we develop, distribute, and launch products.’

‘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,‘ says Ryan.

As with Microsoft recently, Ryan emphasises the need to ‘grow’ the business, although he gives no hint as to how or why everything has changed so suddenly.

Although no company has talked about the issue in public, the problems are two-fold, with the first issue being that publishers went on a hiring spree during the pandemic, apparently expecting the increased demand for game during lockdown to continue indefinitely.

The other problem is that AAA games are simply too expensive and time consuming to make to modern standards, with the Insomniac hacks revealing that Spider-Man 2 cost an incredible $300 million to make – more than most movies.

Publishers have made no attempt to cut budgets though and instead have simply ended up making less games, with Sony in particular constantly talking about pivoting towards live service games, despite still not having released any internally developed titles.

The refusal to acknowledge that traditional AAA game development is no longer sustainable is extremely worrying, with neither Sony nor any other publisher seeming to have a coherent plan for the future.

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