Japan's Sony Group is cutting 900 jobs in its gaming division, including PlayStation. This restructuring is due to sluggish sales of its flagship product, PlayStation. The PlayStation London Studio will also be closed.
According to the Nikkei newspaper on the 28th, Sony Interactive Entertainment (SIE), a gaming company under Sony Group, announced that it will reduce about 900 employees, equivalent to 8% of its workforce, across its global operations in Japan, the Americas, and the Asia-Pacific region.
Jim Ryan, president of SIE, confirmed the layoff plan in an email to employees, stating, "After careful consideration and extensive discussions over several months, change is necessary to continue growing the business and advancing the company." He explained that the PlayStation London Studio will be completely shut down, and other studios will also be affected.
In the United States, all affected employees were notified on the 27th local time, and labor-management consultations will begin in the United Kingdom. In Japan, support programs will be provided to help employees find new jobs at other companies.
The operating profit margin of Sony's gaming business, represented by PlayStation, has been continuously declining. In the earnings announcement on the 14th, the sales forecast for PlayStation 5 in fiscal year 2023 was lowered from 25 million units to 21 million units due to weakening demand. As a result, Sony's stock price plummeted that day, wiping out about $10 billion in market capitalization.
The Nikkei newspaper reported, "With annual sales exceeding 4 trillion yen, the gaming business is Sony's largest business by revenue," adding that "profitability has been deteriorating."
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