Sony Interactive Entertainment on Tuesday became the latest video-game business to reduce its workforce, as it announced plans to cut 900 jobs, representing 8% of its workforce.
Future Preparation and Restructuring
Sony Interactive Entertainment, a unit of Sony Group Corp., stated that the restructuring in its PlayStation unit is difficult but necessary to prepare for the future after discussions about the “evolving” economic landscape.
Sales Projections
Less than two weeks after Sony warned its PlayStation PS5 hardware unit sales would fall short of its annual shipping target, the company said on Feb. 15 that it expects to sell 21 million PS5 units, below its target of 25 million. Sales are expected to gradually decline in the next fiscal year.
CEO Statement
“It has become clear changes need to be made to continue to grow the business and develop the company,” Chief Executive Jim Ryan said in a posting on the company’s website.
Company Decisions
The company has been in talks “over the past few months” over changes in how it develops, distributes, and launches products and concluded that “tough decisions have become inevitable,” Ryan said.
Gaming Industry Layoffs
The gaming industry has recently seen a wave of layoffs, with notable companies making significant staff cuts.
Unity Software Inc.
Unity Software Inc. announced on Jan. 8 that it would be reducing its workforce by 25%, affecting approximately 1,800 employees. The company’s stock took a hit after unveiling its transition plans following the news.
Amazon.com Inc.
In January, Amazon.com Inc. disclosed plans to cut 500 jobs within its Twitch live-streaming unit, a widely used platform among gamers.
Sony Interactive Entertainment
Sony Interactive Entertainment is set to implement layoffs across various regions, spanning the Americas, Europe, the Middle East and Africa, Japan, and Asia-Pacific. In the U.K., Sony is closing its PlayStation Studios facility in London and downsizing staff at the Firesprite studio.
Emotional Impact
CEO Ryan expressed the difficulty of having to bid farewell to valued colleagues and friends during this restructuring phase, acknowledging the emotional toll it may take on employees.
Stock Performance
Following the announcements, Sony’s U.S.-listed stock saw a slight decline of 0.1% on Tuesday. Prior to these developments, the stock had experienced a 9% drop, in contrast to the Nasdaq COMP’s 6.4% increase.
