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Insomniac, Guerrilla, Naughty Dog, and more key internal studios are being downsized.

Chris Kerr, News Editor

February 27, 2024

5 Min Read
The PlayStation Studios logo on a black background
Image via PlayStation

At a Glance

  • SIE is laying off 900 workers across PlayStation Studios to adapt to "evolving economic landscape."
  • The cuts will impact key studios including Guerrilla, Firesprite, Insomniac Games, and Naughty Dog.
  • Thousands of devs have lost their jobs since the turn of the year following cuts at Embracer, Microsoft, Unity, and more.

Sony Interactive Entertainment (SIE) is reevaluating how PlayStation Studios operates and plans to reduce its overall headcount by 8 percent. That means around 900 employees could be laid off in the coming months.

The process will result in widespread downsizing, project cancellations, and studio closures. PlayStation Studios London will close in its entirety, and there will be redundancies at other key studios including Guerrilla, Firesprite, Insomniac Games, and Naughty Dog. Outgoing SIE president and CEO, Jim Ryan, informed staff about the impending layoffs in an email sent out earlier today.

Providing additional comments on the SIE website, Ryan said the company must respond to a changing industry in order to keep delivering on expectations from both developers and players.

"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," wrote Ryan.

In the email itself–pasted in full at the bottom of this article–Ryan said it's imperative that SIE adapts to an "evolving economic landscape" by changing how it develops, distributes, and launches video games.

PlayStation Studios scrapping in-development projects and downsizing key studios

PlayStation Studios head Hermen Hulst echoed those remarks in a separate post and suggested that, with the PlayStation 5 in the fourth year of its lifecycle, the company needs to "step back and look at what our business needs."

To that end, Hulst said PlayStation Studios will be reevaluating how it produces the "immense, narrative-driven stories" it has become known for.

"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," said Hulst.

"To take on these challenges, PlayStation Studios had to grow. We have brought brilliant and successful Studios into our family. We have invested in new technology and partnerships. We have recruited talent from across our industry and beyond.

"But growth itself is not an ambition. PlayStation Studios is committed to continually discovering ways to work together; collaborating and combining our efforts to ensure that we are able to craft games that push the boundaries of play and deliver what you expect from us."

After looking at its portfolio of studios and in-development projects, PlayStation has now decided that some of those titles "will not move forward." Hulst said those cancellations aren't a reflection of the "talent or passion" of their development teams.

"PlayStation Studios will continue to be a creator-led organization driven by evolving our beloved franchises and bringing new gameplay experiences of the highest quality to our fans," he added. "Thank you all for your continued support."

The news comes with the games industry facing a global reckoning in the face of massive job cuts and studios closures. Since the turn of the year thousands of workers at major companies like Microsoft, Embracer, Take-Two, Unity, and now PlayStation have been cut loose, and the wave of mutilation shows no sign of slowing.

Email 

Subject: Important Update Regarding Organizational Restructuring 

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 

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About the Author(s)

Chris Kerr

News Editor, GameDeveloper.com

Game Developer news editor Chris Kerr is an award-winning journalist and reporter with over a decade of experience in the game industry. His byline has appeared in notable print and digital publications including Edge, Stuff, Wireframe, International Business Times, and PocketGamer.biz. Throughout his career, Chris has covered major industry events including GDC, PAX Australia, Gamescom, Paris Games Week, and Develop Brighton. He has featured on the judging panel at The Develop Star Awards on multiple occasions and appeared on BBC Radio 5 Live to discuss breaking news.

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