What led to Sony laying off 900 people? | This Week in Business

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This Week in Business is our weekly recap column, a collection of stats and quotes from recent stories presented with a dash of opinion (sometimes more than a dash) and intended to shed light on various trends. Check every Friday for a new entry.

Sony Interactive Entertainment this week announced plans to cut 900 workers from the PlayStation payroll, or about 8% of its global workforce.

In and of itself, this is a sadly common bit of news. Already this year we've seen Electronic Arts take the axe to 5% of staff, while Supermassive cut about 26%, Wildlife Studios dropped 21%, Deck Nine Games trimmed 20%, Radical Forge shed a handful of staff, Cloud Imperium Games laid off an unknown number, and Die Gute Fabrik basically called it quits, halting production until it finds funding in some unspecified future timeframe.

Wait, that was all just this week? Well at least the year's almost over, right?

Just as it's easy to lose sight of the human cost of a layoff once the numbers get big enough, it's tempting to stop considering these as decisions taken by individual companies for varying reasons and just gesture in the direction of interest rates or "the economy" as the reason why all these people had to lose their jobs.

And sure, that has an impact. But Sony's not Unity or Embracer or one of these companies you watch floundering and say, "Yeah, that sounds about right."

Sony's a consistently profitable market leader riding the success of the PS5 and a blockbuster line up of hits both expected (Spider-Man 2) and otherwise (Helldivers 2). So why the layoffs?

Well, as Sony president Hiroki Totoki explained in the company's recent financial earnings report, the PlayStation business is profitable, but not profitable enough.

STAT | 5.8% - Sony's projected profit margin for the Game and Network Services division for fiscal year 2023, which ends March 31, 2024. It will be the third straight year of declines,