Sony gutted PlayStation Studios to 'keep room for future growth'

Sony made 900 layoffs across PlayStation Studios to ensure it had room for future growth.

That's according to Hideaki Nishino, SVP of platform experience at SIE and future Platform Business Group CEO, who was asked whether investors should be concerned about the relentless spate of layoffs and studio closures during a recent business segment meeting.

In response, Nishino said the job cuts were a reaction to a "dynamically changing" industry and claimed Sony had to make some layoffs so it can reinvest in an "appropriate way."

"We are observing the industry is dynamically changing. Technology, innovation, and also the dynamics of customer behavior. We look forward to investing in the future as well," said Nishino.

"We want to grow and invest in an appropriate way, so we look back at ourselves and have the room to pursue the opportunity of organizational hygiene. So we have done the layoffs—and the [impacted] talent contributed to our business in a good way—but we want to keep the room for future growth."

PlayStation Studios boss attributes cutbacks to pandemic 'windfall'

PlayStation Studios SVP (and another inbound CEO), Hermen Hulst, feels the layoffs sweeping across the industry are the consequence of the windfall studios and publishers received during the pandemic—when many people around the world were isolating indoors and spending more time and money on entertainment products.

"SIE as a studio business group, in particular, were always looking to optimize their resource allocation on an ongoing basis. But I think specifically what you're referring to in recent months and quarters is probably a slight adjustment on the back of the windfall the industry saw during the pandemic," commented Hulst.

"So that might be reflective of that, rather than impacting the long-term growth of the industry, which I believe in general is in a good place. I see this as an adjustment of the pandemic years."

Expanding on its business plan during the meeting, Sony explained its long term aim is to "drive sustainable and profitable growth and invest thoughtfully." The Japanese company also revealed the PlayStation 5 has become the most profitable console generation to date with over $106 billion in sales revenue.

Those billions weren't enough to prevent redundancies across PlayStation Studios. In February, Sony cut 900 jobs across key studios including Firesprite, Insomniac Games, and Naughty Dog to adapt to an "evolving economic landscape." PlayStation Studios London was also shuttered.