Sony cuts 900 PlayStation jobs after PS5 sales fell short of expectations

By Steve Gelsi

Move comes less than two weeks after it says projected PS5 sales will fall short.

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.

Sony Interactive Entertainment, which is a unit of Sony Group Corp. (SONY), said the restructuring in its PlayStation unit is difficult but necessary to prepare for the future after discussions about the "evolving" economic landscape.

The move comes 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 it expects to sell 21 million PS5 units, below its target of 25 million. Sales are expected to fall gradually in the next fiscal year.

"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.

The company has been in talks "over the past few months" over changes in the way it develops, distributes and launches products and concluded that "tough decisions have become inevitable," Ryan said.

The move comes about a month after Microsoft Corp. (MSFT) eliminated 1,900 jobs at Activision Blizzard and Xbox.

Gaming developer software company Unity Software Inc. (U) said on Jan. 8 it would cut 25% of its staff, or 1,800 people. The company's stock fell sharply Tuesday on its quarterly results, when it shared its transition plans.

Also in January, Amazon.com Inc. (AMZN) said it would cut 500 jobs in its Twitch live-streaming unit - a popular platform for gamers.

The cuts at Sony Interactive Entertainment will take place across all regions including the Americas; Europe; the Middle East and Africa; Japan; and Asia-Pacific.

In the U.K., Sony plans to close the PlayStation Studios facility in London and cut staff in the Firesprite studio.

U.S. employees will be notified on Tuesday.

"We will be saying goodbye to friends and colleagues that we cherish during this process, and this will be painful," Ryan said.

Sony's U.S.-listed stock was down by 0.1% on Tuesday.

Prior to Tuesday's trades, the stock was down by 9%, compared to a 6.4% gain by the Nasdaq COMP.

-Steve Gelsi

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02-27-24 1030ET

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