(Reuters) - Japan's Sony (NYSE:SONY) is cutting about 900 jobs at its PlayStation unit and shutting a studio in London, it said on Tuesday as the videogame industry struggles to recover from a post-pandemic slump.
The layoffs will affect about 8% of the division's staff in regions from the Americas to Asia and come days after Sony slashed the annual sales expectation for its PlayStation 5 console.
"We have concluded that tough decisions have become inevitable," said Sony gaming chief Jim Ryan, blaming it on changes in the way the videogame industry develops, distributes and launches products. Ryan is set to retire in March.
The move aligns Sony with the likes of Microsoft (NASDAQ:MSFT) and Tencent-owned Riot Games, which have also laid off thousands of employees in recent months due to slow recovery in the gaming market.
The global videogame market grew just 0.6% last year to $184 billion, according to industry tracker Newzoo, though that was better than a decline of more than 5% in 2022.
The layoffs will also affect Sony's other studios, including U.S.-based Insomniac Games that worked on games such as "Marvel's Spider-Man 2" and Naughty Dog, the studio behind "The Last of Us".
Sony had earlier this month said it expects a gradual decline in unit sales of the PlayStation 5 from the next financial year and that it does not plan to release any major franchise titles in the coming fiscal year.
The device has racked up life-time sales of more than 50 million units since its launch in late 2020, after a slow initial few years when supply shortages caused by the pandemic limited the entertainment conglomerate's device production.