Sony announced on Tuesday that it will be reducing its workforce by about 900 positions at its PlayStation unit and closing a studio in London. This decision comes as the video game industry grapples with recovering from a post-pandemic downturn.
The layoffs will impact approximately 8% of the division’s employees across regions spanning from the Americas to Asia, reported Reuters. This announcement follows shortly after Sony revised down its annual sales forecast for the PlayStation 5 console.
Jim Ryan, Sony’s gaming chief, stated, “We have come to the conclusion that difficult decisions are now unavoidable,” attributing the move to changes in the development, distribution, and launch processes within the video game industry.
Ryan is scheduled to retire in March. Sony’s decision to downsize its PlayStation unit aligns it with other industry giants like Microsoft and Tencent-owned Riot Games, both of which have undergone significant layoffs in recent months.
These moves reflect the broader challenges faced by the gaming market in its slow recovery from the pandemic downturn.
Last year, the global video game market saw minimal growth of just 0.6%, reaching $184 billion, as reported by industry tracker Newzoo. However, this marked an improvement compared to the decline of over 5% experienced in 2022.
These layoffs will extend to Sony’s other studios, impacting well-known entities like U.S.-based Insomniac Games, known for titles such as “Marvel’s Spider-Man 2,” and Naughty Dog, the studio behind “The Last of Us.”
Earlier this month, Sony announced its anticipation of a gradual decline in PlayStation 5 unit sales starting from the next financial year. Additionally, the company revealed that it does not intend to launch any major franchise titles in the upcoming fiscal year.
Despite these projections, the PlayStation 5 has amassed over 50 million unit sales since its late 2020 launch. Initially hampered by pandemic-induced supply shortages, Sony’s device production faced challenges in the first few years.
