Square Enix confirms US, EU layoffs as part of restructuring

Square Enix is set to make an unconfirmed number of layoffs as part of ongoing company restructuring, it told staff in an internal meeting on Monday, VGC understands.

According to people who were in attendance, Square Enix president Takashi Kiryu said that both the company’s American and European arms would be hit with layoffs, which will happen over the course of the next month.

The scale of the layoffs wasn’t shared, but staff were told that people working in publishing, IT, and Square Enix’s Collective indie games division will be predominantly affected.

Those impacted will be informed this week, staff were told. In the UK, employees will enter into a one-month consultancy period, as per local employment law, while US-based staff could leave their roles before June.

Following the internal meetings on Monday, many of Square Enix’s main Slack channels were locked, VGC was told.

The layoffs coincided with the publication of the company’s quarterly financial results today, in which Square Enix said it plans to “rebuild overseas business divisions from the ground up” and has “begun optimizing costs at its European and American offices via structural reforms”.

VGC has asked Square Enix for comment on this story.

Kiryu, who was appointed as the Final Fantasy firm’s new boss in June 2023, has been enacting a large-scale reorganisation of Square Enix’s development efforts, in an effort to reverse recent disappointing sales of its biggest games.

In Japan, Square Enix recently promoted a new group of creators to its executive officers, and placed checks on producers’ influence over individual projects, according to Bloomberg.

Earlier today, Square Enix published a new medium-term business plan, which revealed its intention to make its AAA games multiplatform going forward.

The plan, which the publisher has dubbed ‘Square Enix Reboots and Awakens’, lays out a three-year strategy which it hopes will lead to “long-term growth”.

Square Enix’s latest financial results indicated that profits were down nearly 70% from the previous year, partly due to “the recognition of ¥22,087 million ($141 million) in losses on disposal of content as an extraordinary loss”.

Those losses are related to the cancellation of projects that don’t fit with its future strategies, it said, suggesting they may have been either tied to a single platform or relied too heavily on external developers.

Square Enix said that, going forward, it will “aggressively pursue a multiplatform strategy that includes Nintendo platforms, PlayStation, Xbox and PCs”.

By doing this, it will be able to “build an environment where more customers can enjoy our titles in regards to major franchises and AAA titles, including catalogue titles,” it said.

While not explicitly mentioned in the plan, recent Final Fantasy games including Final Fantasy 7 Remake, Final Fantasy 16 and Final Fantasy 7 Rebirth all launched as PS5 exclusives, and it’s been claimed that sales of the latter titles have been underwhelming.