PlayStation’s Tough Decision: 900 Jobs Axed, London Studio Closure

Sony’s London Studio intends to lay off about 900 workers in the PlayStation division, or about 8% of the entire workforce worldwide. 

President and CEO of PlayStation Jim Ryan sent an email to staff members describing this choice as “extremely difficult” and noting that it was made after “careful deliberation and numerous leadership discussions spanning several months.” 

Layoffs are being implemented, according to Ryan, to “optimise resources” and maintain the business’s “long-term viability.”

In a blog post that included an email to the workers, CEO Jim Ryan called it “regrettable news” and said it was “a challenging day for our organization.”

“We have come to the realisation that difficult choices are now unavoidable,” he said.

“The leadership team and I have made the immensely tough call to reorganise our operations, a move that unfortunately entails downsizing our workforce, affecting highly skilled individuals who have played a significant role in our achievements.”

The layoffs follow a month after Microsoft announced intentions to cut 1,900 positions in its gaming division, including those within the recently acquired Activision-Blizzard.

“It’s significant to witness the closure of the esteemed Sony London studio, especially considering Sony’s influential role in UK game development culture,” Halli Bjornsson, head of UK developer Lockwood Publishing, remarked.

“Our industry is undergoing significant changes, presenting challenges. However, the talent and heritage of UK game development are exceptional on a global scale. We can overcome these challenges by nurturing this talent and capitalizing on upcoming opportunities.

Founded in 2002 as the result of the merger of two other London-based studios that operated under the PlayStation brand, Sony’s London Studio has developed several franchises over the last 20 years, including the football franchise This Is Football from the 2000s and the karaoke game SingStar. 

More recently, the studio has concentrated on creating virtual reality (VR) games specifically for the headset made by Sony, including VR Worlds and the critically acclaimed shooter Blood & Truth. 

According to information on LinkedIn, the studio employs between 51 and 200 people. Before the announcement, the team was working on “an undisclosed online co-op combat game” set in London.

Sony’s PlayStation 5 sales have crossed 50 million copies worldwide, which is more than twice as many as Microsoft sold its Xbox Series X/S. However, Nintendo has sold close to 140 million units of its Switch platform globally since it was released three years earlier.

Sony announced an updated estimate in their financial report for February that called for four million less console sales by the end of March. PlayStation’s sales increased by 16% over the previous year, but its operating profitability decreased by 25%.

Ampere Analysis’s Piers Harding-Rolls, an industry analyst for the gaming sector, pointed out that Sony Interactive Entertainment has joined increasing number of gaming companies that have drastically reduced their workforces over the last 12 to 18 months. 

He blamed this tendency on the unaffordable rising expenses of producing big-budget video games. These difficulties have arisen amid a post-pandemic market shift, forcing numerous businesses to conform to the changing and hazardous business gaming environment.