Jim Ryan—President & CEO, Sony Interactive Entertainment—revealed a sobering restructuring plan earlier today: "The PlayStation community means everything to us, so I felt it was important to update you on a difficult day at our company. We have made the extremely hard decision to announce our plan to commence a reduction of our overall headcount globally by about 8% or about 900 people, subject to local law and consultation processes. Employees across the globe, including our studios, are impacted." Ryan's full email—addressed to the entire Sony Interactive Entertainment workforce—can be found here. It reveals that company leadership has decided to close its PlayStation London Studio—the South East UK team is/was reportedly working on an announced "PS5 online game." Microsoft revealed a larger scale layoff program late last month—affecting 1900 employees—albeit without shuttering any major development studios. A number of its California-based teams are in the process of ditching "traditional" office locations (including a former aircraft hangar), and are moving to a work from home (WFH) model.

The SIE chief believes that current circumstances are not sustainable: "These are incredibly talented people who have been part of our success, and we are very grateful for their contributions. However, the industry has changed immensely, and we need to future ready ourselves to set the business up for what lies ahead. We need to deliver on expectations from developers and gamers and continue to propel future technology in gaming, so we took a step back to ensure we are set up to continue bringing the best gaming experiences to the community." His email outlines an "impact for employees across all SIE regions—Americas, EMEA, Japan, and APAC," with reductions affecting native development teams and Firesprite, a Liverpool, UK-based studio (founded by former Psygnosis veterans). Hermen Hulst, Head of PlayStation Studios, also posted a blog entry on the subject of SIE global layoffs—he confirmed a number of reductions and project cancellations.

Hermen Hulst:Today, Sony Interactive Entertainment initiated a reduction in our workforce - including within PlayStation Studios - and I wanted to talk about the impact that will have.

These decisions have been extremely difficult, but they are necessary, and I think it's important to be transparent:

The US based studios and groups impacted by a reduction in workforce are:

• Insomniac Games, Naughty Dog, as well as our Technology, Creative, and Support teams

In UK and European based studios, it is proposed:

• That PlayStation Studios' London Studio will close in its entirety;
• That there will be reductions in Guerrilla and Firesprite

These are in addition to some smaller reductions in other teams across PlayStation Studios. Our goal at PlayStation Studios has always been to make the best games for PlayStation fans, and our global community of studios represent some of the most creative and talented teams within the gaming industry.

PlayStation 5 is in its fourth year, and we are at a stage where we need to step back and look at what our business needs. At the same time, our industry has experienced continuing and fundamental change which affects how we all create, and play, games. Delivering the immersive, narrative-driven stories that PlayStation Studios is known for, at the quality bar that we aspire to, requires a re-evaluation of how we operate.

Delivering and sustaining social, online experiences - allowing PlayStation gamers to explore our worlds in different ways - as well as launching games on additional devices such as PC and Mobile, requires a different approach and different resources. To take on these challenges, PlayStation Studios had to grow. We have brought brilliant and successful Studios into our family. We have invested in new technology and partnerships. We have recruited talent from across our industry and beyond.

But growth itself is not an ambition. PlayStation Studios is committed to continually discovering ways to work together; collaborating and combining our efforts to ensure that we are able to craft games that push the boundaries of play and deliver what you expect from us. We looked at our studios and our portfolio, evaluating projects in various stages of development, and have decided that some of those projects will not move forward.

I want to be clear that the decision to stop work on these projects is not a reflection on the talent or passion of team members. Our philosophy has always been to allow creative experimentation. Sometimes, great ideas don't become great games. Sometimes, a project is started with the best intentions before shifts within the market or industry result in a change of plan.

I am deeply saddened to see talented individuals leave the company. I have so much admiration, appreciation and respect for their work. PlayStation Studios will continue to be a creator-led organization driven by evolving our beloved franchises and bringing new gameplay experiences of the highest quality to our fans.

Thank you all for your continued support.