If you’re at all old enough to recall the “dot-com bubble” bursting in the early aughts, the current state of the tech industry should seem depressingly familiar to you.
Back in the mid-’90s, with the advent of the internet, online e-commerce was booming at unprecedented levels, and businesses invested in that market — to a fault.
Once the allure and novelty of the internet subsided, it became clear that e-commerce, while here to stay, wasn’t as ubiquitous as the earliest internet users made it out to be.
The resulting fallout from that bubble bursting saw countless online companies and employees downsize, if not outright shutter.
Fast forward a couple of decades, and it appears a different bubble is bursting, albeit one with a remarkably similar fallout.
Sony Interactive Entertainment, the tech conglomerate’s gaming division that oversees the wildly popular PlayStation brand, announced that it would be downsizing its workforce on Tuesday.
Sony Interactive Entertainment announces a reduction in its global workforce: https://t.co/O5hLTYGltq
— PlayStation (@PlayStation) February 27, 2024
“The PlayStation community means everything to us, so I felt it was important to update you on a difficult day at our company,” SIE president Jim Ryan said in the announcement. “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.
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“Employees across the globe, including our studios, are impacted.”
Ryan made it clear that this current round of layoffs was a direct response to the economic climate and a manner of future-proofing the PlayStation brand.
“These are incredibly talented people who have been part of our success, and we are very grateful for their contributions,” Ryan continued. “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.”
Of note, Ryan pointed out that Sony’s United Kingdom studios are facing the brunt of this restructuring.
For American employees, Ryan’s email simply noted “For those of you in the US, all impacted employees will be notified today.”
On the U.K. side, Ryan noted the following:
- That PlayStation Studios’ London Studio will close in its entirety;
- That there will be reductions in Firesprite studio;
- And that there will be reductions in various functions across SIE in the UK.
So while the U.S. side of operations seems to be on a case-by-case basis, Sony’s U.K. offerings are undergoing much wider-spread changes.
“The proposed changes mean that we will enter a period of collective consultation before any final decisions are taken,” Ryan added, noting that nothing was fully finalized yet.
Sony’s news comes just about a month after its chief video game industry rival, Microsoft and its Xbox brand, went through layoffs that affected thousands of people, so it’s clear that Sony is not immune to the current bubble that is bursting.
And that bursting bubble, for the unfamiliar, is directly linked to the coronavirus lockdowns that kept untold number of people locked up in their homes against their will.
What else is there to do at home apart from watching streaming and playing video games? Not much, and that’s why streaming and video game companies thrived during those years.
As the world swiftly moves on from those lockdowns? Stay-at-home activities (any of them) aren’t going to be nearly as in demand… and that’s going to require companies — even ones as massive and ubiquitous as Microsoft and Sony — to re-calibrate for the future.
