Sony has announced it will lay off 8 percent of its Sony Interactive Entertainment employees globally, around 900 people, as it looks to adapt to a rapidly changing market.
“The leadership team and I made the incredibly difficult decision to restructure operations,” President and CEO of Sony Interactive Entertainment Jim Ryan wrote in an email to employees.
“We had to step back, look at our business holistically, and move forward focusing on the long-term sustainability of the company.”
The decision had been on the table for several months.
“The industry has changed immensely,” Mr. Ryan explained. “We need to future ready ourselves to set the business up for what lies ahead.”
Mr. Ryan earlier announced he would retire in March, after being with the company for three decades. He expressed his regret about having to let go of “very talented individuals” who contributed to the success of the company, as he himself joined Sony a few months before the launch of the first PlayStation console in 1994.
The job cuts will affect personnel worldwide, and involve shrinking the company’s U.S.-based technology, creative, and support teams, and closing down PlayStation’s London Studio entirely.
For the United States and Europe, the job cuts will affect game developers Insomniac Games and Naughty Dog in the United States, Guerrilla in The Netherlands, and Firesprite in the UK.
Hermen Hulst, head of PlayStation Studios, followed-up in a blogpost to corroborate the necessity of the decision.
“Delivering the immersive, narrative-driven stories that PlayStation Studios is known for, at the quality bar that we aspire to, requires a re-evaluation of how we operate.”
Mr. Hulst clarified the layoffs were based on a reassessment of upcoming games in various stages of development.
“Our philosophy has always been to allow creative experimentation,” he explained. “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.”
He also made sure to emphasize that the decision to terminate these projects was “not a reflection on the talent or passion of team members.”
Mr. Hulst wrote he was “deeply saddened” to have to end cooperation with so many talented individuals. “I have so much admiration, appreciation and respect for their work.”
The company said there will be a period of collective consultation for those impacted by the job cuts before any final decision was made. In addition, a next career support program is being launched in Japan to provide employees with help in looking for new opportunities.
The jobs cuts come a month after Microsoft announced its gaming division was slashing 1,900 jobs.
Though PlayStation’s revenue was up by 16 percent compared to the same period one year prior, its operating income has fallen by 25 percent. In addition, the company announced in February that it estimates it will sell 4 million fewer consoles than expected by the end of March.
