Bungie is about to undergo major changes. The Destiny 2 maker is laying off hundreds more employees, integrating more deeply with its parent company Sony, and spinning off one of its in-development games into a separate PlayStation studio. CEO Pete Parsons called it a “difficult and painful day” for the team.
The executive wrote in a blog post that “substantial changes” were required in order for Bungie to weather the “most difficult changes” it’s ever faced. In addition to cutting 220 employees, or nearly 20 percent of the studio’s headcount, Bungie will now focus its efforts exclusively on Destiny and Marathon, signaling that its days of investing in prototyping new games are behind it.
The studio is also facing two other big shifts. Following its acquisition by Sony back in 2022, 155 employees, or about 12 percent of its existing headcount, will move over to the parent company in an apparent move to reduce the need for further layoffs. Another team currently working on an action game in a “brand-new science-fantasy universe” will be spun out of Bungie into its own separate first-party PlayStation studio.
“Inexcusable,” tweeted current Destiny 2 community lead Dylan “DMG04" Gafner following the news. “Industry leading talent being lost, yet again. Accountability falling upon the workers who have pushed the needle to deliver for our community time and time again. Please maintain focus on those who’ve lost their position & income. Offer help where you can.”
The latest round of cost cutting comes nearly a year after a round of layoffs last fall amid delays and declining revenue from Destiny 2 and despite the critical praise and apparent sales success of The Final Shape expansion in June. IGN previously reported that Bungie was at risk of losing any remaining independence from Sony if its financials didn’t improve. Current and former employees told the website earlier this year that they were worried more cuts were coming.
Earlier this year, Sony laid off hundreds of employees across its other first-party studios including Naughty Dog (The Last of Us) and Insomniac Games (Spider-Man 2) as the PlayStation 5 maker tries to boost profit margins while game budgets keep rising.
Here’s Parsons’ full statement:
This morning, I’m sharing with all of you some of the most difficult changes we’ve ever had to make as a studio. Due to rising costs of development and industry shifts as well as enduring economic conditions, it has become clear that we need to make substantial changes to our cost structure and focus development efforts entirely on Destiny and Marathon.
That means beginning today, 220 of our roles will be eliminated, representing roughly 17% of our studio’s workforce.
These actions will affect every level of the company, including most of our executive and senior leader roles.
Today is a difficult and painful day, especially for our departing colleagues, all of which have made important and valuable contributions to Bungie. Our goal is to support them with the utmost care and respect. For everyone affected by this job reduction, we will be offering a generous exit package, including severance, bonus and health coverage.
I realize all of this is hard news, especially following the success we have seen with The Final Shape. But as we’ve navigated the broader economic realities over the last year, and after exhausting all other mitigation options, this has become a necessary decision to refocus our studio and our business with more realistic goals and viable financials.
We are committing to two other major changes today that we believe will support our focus, leverage Sony’s strengths, and create new opportunities for Bungie talent.
First, we are deepening our integration with Sony Interactive Entertainment, working to integrate 155 of our roles, roughly 12%, into SIE over the next few quarters. SIE has worked tirelessly with us to identify roles for as many of our people as possible, enabling us together to save a great deal of talent that would otherwise have been affected by the reduction in force.
Second, we are working with PlayStation Studios leadership to spin out one of our incubation projects – an action game set in a brand-new science-fantasy universe – to form a new studio within PlayStation Studios to continue its promising development.
This will be a time of tremendous change for our studio.
Let’s unpack how we ended up in this position; it’s important to understand how we got here.
For over five years, it has been our goal to ship games in three enduring, global franchises. To realize that ambition, we set up several incubation projects, each seeded with senior development leaders from our existing teams. We eventually realized that this model stretched our talent too thin, too quickly. It also forced our studio support structures to scale to a larger level than we could realistically support, given our two primary products in development – Destiny and Marathon.
Additionally, in 2023, our rapid expansion ran headlong into a broad economic slowdown, a sharp downturn in the games industry, our quality miss with Destiny 2: Lightfall, and the need to give both The Final Shape and Marathon the time needed to ensure both projects deliver at the quality our players expect and deserve. We were overly ambitious, our financial safety margins were subsequently exceeded, and we began running in the red.
After this new trajectory became clear, we knew we had to change our course and speed, and we did everything we could to avoid today’s outcome. Even with exhaustive efforts undertaken across our leadership and product teams to resolve our financial challenges, these steps were simply not enough.
As a result, today we must say goodbye to incredible talent, colleagues, and friends.
This will be a challenging time at Bungie, and we’ll need to help our team navigate these changes in the weeks and months ahead. This will be a hard week, and we know that our team will need time to process, to ask questions, and to absorb this news. Today, and over the next several weeks, we will host team meetings and town halls, team breakout sessions, and private, individual sessions to ensure we are keeping our communication open and transparent.
Bungie will continue to make great games. We still have over 850 team members building Destiny and Marathon, and we will continue to build amazing experiences that exceed our players’ expectations.
There will be a time to talk about our goals and projects, but today is not that day. Today, our focus is on supporting our people.