Bungie, the video game developer known for its flagship game Destiny 2, is cutting approximately 100 jobs from its workforce of around 1,200. This decision comes after management warnings of a significant decrease in the game’s popularity. Executives revealed that revenue was 45% below projections for the year, citing weak player retention as the primary reason. The latest expansion, Lightfall, received a poor reception, and the upcoming expansion, The Final Shape, was met with only moderate feedback. Consequently, the release date for The Final Shape has been pushed back to June 2024 from February 2024 to allow for product improvements.
To cope with the financial challenges, Bungie CEO Pete Parsons announced several cost-cutting measures during a meeting with staff. These measures include reduced travel expenses, salary freezes, and hiring freezes. Parsons emphasized the importance of everyone working together in weathering the storm and restoring revenue.
Unfortunately, on Monday morning, many employees discovered a 15-minute meeting on their calendars, which turned out to be a mass layoff announcement. Bungie laid off around 8% of its workforce, according to Bloomberg’s review of official documentation. At this time, Bungie has not provided any comment on the matter.
Those who were laid off will receive at least three months of severance pay and three months of Bungie-paid COBRA health insurance. However, other benefits, including expense reimbursements, were terminated as of Monday. Those affected rushed to submit their pending reimbursements. Additionally, while laid-off employees will receive prorated bonuses, those on a vesting schedule following Sony Group Corp’s acquisition of Bungie in January 2022 will lose any unvested shares starting next month.
These layoffs are part of a broader cost-cutting initiative within Sony’s PlayStation unit. Other studios affected by job cuts include Naughty Dog, Media Molecule, and the San Mateo office. TD Cowen analyst Doug Creutz believes that the recent events indicate a restructuring at PlayStation. PlayStation President Jim Ryan announced his resignation last month.
The majority of the layoffs at Bungie affected support departments such as community management and publishing. Bungie informed remaining staff that some of these areas will be outsourced in the future. – Bloomberg
