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Sony Online Entertainment Lays Off Staff in Austin, San Diego

By - Source: GameSpot | B 7 comments

Sony Online entertainment is cutting jobs to better streamline its workforce, and to reduce costs.

Sony Online Entertainment said on Wednesday that it will eliminate positions in both its San Diego and Austin studios as part of a strategic decision to reduce costs and streamline its workforce. The studio assures both PC and PlayStation fans alike that this move will not have any impact on current and upcoming games in progress.

"This strategic alignment of resources better positions SOE to remain a global leader in online games, as well as to align development resources towards our current portfolio of MMOs and the highly-anticipated future installments of the EverQuest franchise, EverQuest Next Landmark and EverQuest Next," the company said.

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The studio currently maintains a number of PC-based and PlayStation 3 titles including Planetside 2, DC Universe Online, EverQuest, EverQuest II, Wizardry Online, Free Realms and many others. The company just revealed the next stage in its flagship MMO's evolution, EverQuest Next, along with the EverQuest Next Landmark toolkit, the latter of which arrives sometime this winter.

"As a company, our goal is to focus on our core expertise of MMO games and as part of these efforts, we had to make the difficult decision to eliminate positions," the studio said on the SOE forums. "We deeply value our employees and are grateful for all they’ve contributed to our company and games. They will be missed by colleagues and friends, and we wish them well in the future."

SOE did not disclose how many people will be affected by the layoffs.

Polygon reportedly acquired a company-wide email written by SOE president John Smedley who called the layoffs a "horrible, sickening experience". He said that many SOE titles are still performing well, but the layoffs were necessary to bring expenses in line with the company's current revenue.

"For the past year we've done everything possible to avoid this situation," said Smedley. "We rightfully should have done this nearly a year ago but we have been fighting very hard to keep this from happening."

Smedley then stated that the company needed to improve its performance so that it can rehire those individuals that lost their jobs. He knows most of them personally, he said, some of which have been with the company since the very beginning. None of these people deserved to lose their jobs, he said.

"Our goal as a company needs to be to make incredible games and grow again so we can bring our friends back," he said in the email. "We're aren't slowing down development on [EverQuest Next] at all. In fact you can fully expect it to ramp up and a lot of people will end up helping to make the most amazing thing we've ever done as a company."

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  • 2 Hide
    hsyuts , August 29, 2013 12:09 AM
    "We are firing you so that we can hire you again in the future."
  • 0 Hide
    enewmen , August 29, 2013 12:11 AM
    I used to know John Smedley and Russell Shanks in Mt. Carmel High School - AP Computer Science. Too bad this had to happen :( 
  • 0 Hide
    ubercake , August 29, 2013 5:28 AM
    Usually, a company is legally obligated to make an announcement like this when a significant number of people are being laid off. This is too bad.

    Sony has been getting smaller for a while now. They used to be a great company.
  • Display all 7 comments.
  • 1 Hide
    Murissokah , August 29, 2013 7:17 AM
    @ubercake

    Actually, this is Sony getting greater. Since they changed their CEO, there were many strategical changes, surrounding a major policy in focusing on what they are great at. These changes come with big layoffs, unfortunately.

    Expect Sony to excel in video gaming consoles, digital imaging (TV+Cameras), mobile phones and notebooks. Just go back a few years and see how the Xperia lineup improved. I'm happy to consider them a viable purchase again.

    Their stocks have risen by about 100% from December 2012 to today.

  • 1 Hide
    kinggraves , August 29, 2013 11:31 AM
    "Their stocks have risen by 100% in a year." is a shortsighted answer to a long term question that neglects to mention how far their stocks dipped in order to get that sharp increase or how it was ultimately achieved. Layoffs happen, but Sony in general brought themselves into the black by selling off many of their resources, including the TV screens that were one of the few products that actually had quality. Investors only care about the present, they just want to buy low and sell high and make as much as possible. They don't care if those results were achieved at cost to the company's future. Assets that are no longer there means less potential for future profits. I find Smedley's statements to be the usual two faced corporate talk. It hurt to see them go? How much does he get paid as President? Which would hurt him more, taking a working salary or letting those people go? I'm betting on the former.
  • 0 Hide
    Murissokah , August 29, 2013 12:08 PM
    @kinggraves

    Yes, I did intentionally not mention the fall before the rise. I did that because I believe the company is improving.

    You are wrong though, when you say they dug their grave by selling resources. They got into the messy scenario they are trying to leave by having an overcumbersome structure, combined with fierce competition and even a natural disaster.

    Also, they never sold their TV division. They did end a joint-venture with Samsung by selling the 50% stake. They did that because they felt they could achieve a more efficient product cycle and gain competitive advantage over their main adversary. Bravias are still coming up, new and improved.

    I'm not going to speak for a guy I don't know about (Smeadley), but Sony CEO Kazuo Hirai has given up his bonus of over 1.5 milion USD, along with negotiating an average 40% pay cut to 40 of the top executives in the company:

    http://www.theguardian.com/technology/2013/may/01/sony-senior-management-give-up-bonuses

    They also sold the behemoth of a building they had in NY. So yes, I believe very much they are heading the right way, and layoffs are necessary when you come from a huge structure to something competitive. Ask Toyota.
  • 0 Hide
    falchard , August 29, 2013 7:23 PM
    SOE is pretty much an embarrassment of a company from San Diego. I am surprised Sony did not restructure the entity sooner. Their sole reason for existing was due to the success of being an early player in mmo gaming.
    The big issue is the upper management of the company are failures at managing. If they want this company to have any hope of being successful again, they should be canning the upper management and replacing them with competent people. They have ignored their customer base, let marketing steer their development, and let go of talent in order to promote friends and ass kissers.
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