The tech industry continues to suffer a wave of job cuts, with video game maker Sony PlayStation announcing a reduction in its workforce on Tuesday. The company’s CEO, Jim Ryan, told employees in an email that around 900 people — eight percent of the PlayStation Interactive Entertainment division’s global staff — would lose their jobs as part of a restructuring plan. He said the reduction would affect people in every region, with several studios closing altogether. The PlayStation London studio, founded in 2002 and specialized in virtual reality gaming projects, will close in its entirety, while the technology, creative, and support teams at Naughty Dog, Insomniac Games, and Guerrilla Games will also see staff cuts.
Ryan cited the “challenging environment for the gaming industry” in explaining why the changes were being made. He said the reductions were necessary to “future-ready ourselves to set the business up for what lies ahead.” He added that the company would continue developing new products and services, focusing on streamlining operations and working on future technologies.
The announcement comes just a few weeks after the PlayStation maker revised its sales projections for its flagship console, saying it expected to sell 21 million units this year, down from its original forecast of 25 million. That decline has led to a slump in share prices for the company, which lost almost $6 billion in market value on Tuesday.
Ryan’s memo to staff was titled “The Time for Change Has Come,” it praised those affected by the layoffs for their contributions and assured them that they would be supported, including through severance benefits. He said the PlayStation company was “navigating a rapidly changing business landscape.”
The news of the layoffs is a further blow to the gaming industry, which has already seen a series of closures and cutbacks. Microsoft announced in January that it was laying off an eye-watering 1,900 employees, while “League of Legends” developer Riot has also been cutting back on staff. The industry faces a post-pandemic spending slowdown, hurting video game makers by driving up production costs and forcing companies to rethink their plans.
Despite the turmoil, many analysts believe the gaming sector remains strong, with the popularity of digital and augmented reality (AR) games on smartphones and other devices providing a solid base for growth. Meanwhile, many traditional games are being developed to use the latest hardware.
The PlayStation division is one of the biggest in the industry, with a roster of successful games and a strong presence on mobile platforms. Its famous line of gaming consoles is also one of the best-selling products in the tech industry. The division’s latest offerings are the PS4 Pro and PSVR, which have sold more than 15 million units since their launch in 2014.