Today In Tech Layoffs: Sony Interactive And Expedia

Sony's gaming wing has become the latest technology org to announce broad layoffs, including the complete closure of the London office of PlayStation Studios amid other headcount reductions. 

Sony Interactive Entertainment (SIE) announced the move in a pair of statements on Tuesday, one of which included an internal memo sent by CEO Jim Ryan to employees. In the letter, the big cheese said SIE planned to cut eight percent of its staff, or about 900 people, worldwide. 

"The goal is to streamline our resources to ensure our continued success and ability to deliver experiences gamers and creators have come to expect from us," Ryan said. 

Along with closing its London studio, SIE PlayStation Studios head Hermen Hulst said cuts would be made at Guerrilla Games, makers of the Horizon and Killzone series, and Firesprite, a studio in Liverpool, England. 

In the US, cuts are being made in SIE's technology, creative, and support teams. US-based studios Naughty Dog, makers of The Last of Us and Uncharted games, and Insomniac Games, which has produced the Spyro, Ratchet and Clank series, and several Marvel spinoffs, will also be affected. 

According to Hulst, the video gaming industry has "experienced continuing and fundamental change which affects how we all create, and play, games" that requires re-evaluation of how the corporation operates. In recent years PlayStation Studios has taken that to mean it needed to grow, Hulst said, "but growth itself is not an ambition." 

"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," Hulst stated.

'Technical achievements' at Expedia = job cuts in tech division

Sony isn't alone in cutting its workforce this week – online travel booking company Expedia Group, which also owns brands like Vrbo and Travelocity, said it was cutting 1,500 out of an estimated 17,500 jobs, too. That's about a nine percent reduction.

Official confirmation of the layoffs at Expedia came in the form of an SEC filing, which disclosed the travel biz intended to notify workers this week, starting Monday. The biz said it expects to incur between $80 and $100 million in costs as part of the restructuring, most of which is severance and other compensation. 

Geekwire published what it said was an internal memo from outgoing Expedia CEO Peter Kern, which explained that most of the layoffs will hit Expedia's product and technology division. 

"With so much technical achievement over the last 12 months and so much tech debt behind us, we now are obliged to take a close look at roles, skills, teams, and locations to ensure that our resources are focused in the right areas," Kern said in the reported memo. 

What's behind the continued layoffs?

Many hoped that, after a brutal year of layoffs in the tech world, 2024 would be a different story. So far that doesn't seem to be the case. 

As we've reported in the first couple months of this year, the cutbacks have continued, with big names like Google, Cisco and others shedding tens of thousands of jobs so far this year - around 44,000 based on Layoffs.fyi's estimate.

As other have pointed out, the US economy is apparently doing well, though you almost wouldn't know it if you focused solely on tech, which continues to slash roles in relatively large numbers. 

So, what's the issue – is the industry still reeling from pandemic over-hiring; are executives seeing a positive reaction from the stock market to layoffs and so continuing with more of the same; is the explosive growth in AI already disrupting jobs; or all, some, or none of the above?

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It's important to keep in mind, Gartner managing VP of HR practice George Penn told The Register, that we're still in the peak period for layoffs, which typically runs from November to February. 

"​​Most organizations are correcting for the previous year as well as planning for the future year, whether that's due to over hiring or organizational performance," Perry told us. That said, AI still gets some of the blame. 

"I do believe AI is becoming a more important variable in some of these layoff and restructuring decisions," Perry told us. "Organizations may see AI contribute greatly to their productivity, and if an organization is getting a lot of value out of AI, then they may not hire as much."

If an organization is getting a lot of value out of AI, they may not hire as much

Many outfits are only just now beginning to understand the potential replacement value of AI, Perry explained, so determining the degree to which machine learning is affecting workforce slashing and hiring means keeping an eye on a few layoff and hiring cycles. 

A report published in January by Janco, however, concluded that only a net of 700 IT jobs were created in 2023 after layoffs were taken into account, which the consultancy blamed in part on AI being introduced. 

While Sony may simply be re-evaluating how to make money in the video game industry, Expedia has made much of its integrations with OpenAI's ChatGPT in the past year, describing 2024 as "the year [generative AI] transforms travel booking forever." 

With technical achievements being mentioned as a core reason for swinging the ax, it seems AI might be to blame for at least one of the most recent rounds of tech industry job cuts. ®