(Bloomberg) -- Bungie’s decision to cut an estimated 100 jobs from its staff of about 1,200 followed dire management warnings earlier this month of a sharp drop in the popularity of its flagship video game Destiny 2.
Just two weeks ago, executives at the Sony-owned game developer told employees that revenue was running 45% below projections for the year, according to people who attended the meeting.
Chief Executive Officer Pete Parsons pinned the big miss on weak player retention for Destiny 2, which has faced a poor reception since the release of its latest expansion, Lightfall.
The next expansion, The Final Shape, was getting good — not great feedback — and management told those present that they planned to push back the release to June 2024 from February, according the people, who asked not to be identified because they weren’t authorized to speak publicly. The additional time would give developers a chance to improve the product.
In the meantime, Parsons told staff Bungie would be cutting costs, such as for travel, as well as implementing salary and hiring freezes, the people said. Everyone would have to work together to weather the storm, he said, leaving employees feeling determined to do whatever was needed to get revenue back up.
But on Monday morning the news got worse: Dozens of staffers woke up to mysterious 15-minute meetings that had been placed on their calendars, which they soon learned were part of a mass layoff. Bungie laid off around 8% of its employees, according to documentation reviewed by Bloomberg. Bungie didn’t respond to requests for comment.
Employees who were let go will receive at least three months of severance and three months of Bungie-paid COBRA health insurance, although other benefits, such as expense reimbursements, ended Monday, sending some staff racing to submit their receipts.
Laid-off staffers will also receive prorated bonuses, although those who were on a vesting schedule following Sony Group Corp.’s acquisition of Bungie in January 2022 will lose any shares that weren’t vested as of next month.
The layoffs are part of a larger money-saving initiative at Sony’s PlayStation unit, which has also cut employees at studios such as Naughty Dog, Media Molecule and its San Mateo office.
TD Cowen analyst Doug Creutz wrote in a report Monday that “events over the last few days lead us to believe that PlayStation is undergoing a restructuring.”
PlayStation president Jim Ryan announced last month that he plans to resign.
Many of the layoffs at Bungie affected the company’s support departments, such as community management and publishing. Remaining Bungie staff were informed that some of those areas will be outsourced moving forward.
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