Sony Announces Restructuring: 900 Job Cuts in PlayStation Division

Sony reduced its forecasts for the number of sold PS5 consoles from 25 to 21 million by March this year, and this affected the sharp decline of the company in the stock markets

by Sededin Dedovic
Sony Announces Restructuring: 900 Job Cuts in PlayStation Division
© Koichi Kamoshida / Getty Images

On Tuesday, Sony Interactive Entertainment announced its decision to lay off about 900 employees at its PlayStation unit, which represents approximately 8% of the company's total global workforce. The news marks the latest in a string of tech firms announcing job cuts.

The president and CEO of the PlayStation unit, Jim Ryan, in an e-mail sent to employees, which was later released publicly, pointed out that these changes are necessary in order to continue the growth of the business and the further development of the company.

"After careful consideration and many management conversations over several months, it became clear that changes were necessary to continue to grow the business and develop the company," said the unit's president and CEO Jim Ryan.

Through careful consideration and a series of constructive discussions, it was concluded that restructuring is necessary in order to adapt to changing market conditions and ensure the future viability of the company. It is important to note that these changes will affect employees in all regions of the company, and it is particularly pointed out that PlayStation's studio in London will be completely closed, while several other studios will also be affected by these decisions.

The move comes in light of a recent cut in sales forecasts for the PlayStation 5, the Japanese gaming giant's flagship console. On February 14, Sony revised its sales projection after warning of weaker demand. The company previously forecast sales of nearly 25 million PS5 units during the fiscal year ending in March, but has now cut that forecast to 21 million.

The news caused a sharp drop in the value of the company's shares on the stock market, reflecting investor concerns about the company's future market performance. Analysts have speculated that Sony could address these challenges by releasing a refreshed version of the PlayStation 5 later this year.

This strategy could be a step towards rekindling consumer interest and revitalizing the console market. Additionally, it could rely on exclusive titles and technological advancements to attract new customers and retain its existing user base.

Overall, the decision to reduce the workforce in the PlayStation unit represents a difficult step for Sony Interactive Entertainment, but at the same time it represents a strategic maneuver aimed at adapting to changing market conditions and ensuring the company's long-term competitiveness.