Bungie Announces Mass Layoffs Less Than Two Months After Destiny 2: The Final Shape’s Launch

Destiny developer Bungie has announced a significant round of layoffs, in what is just the latest example of a major studio cutting hundreds of jobs. The company also revealed a brand-new game, but it will no longer be developed internally and is shifting to an new internal studio at PlayStation. In a blog post, Bungie executive Pete Parsons confirmed the company is cutting about 17% of its workforce, or around 220 people. Late last year, Bungie had a round of layoffs affecting more than 100 people.

“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,” Parsons said.

The executive said layoffs are happening at “every level” of Bungie, going on to note that “most” of Bungie’s executive or senior leader positions are impacted.

Everyone affected by the cuts is getting a “generous” package that includes severance pay, a bonus, and health coverage for a period of time.

Parsons went on to say that, as part of this shift, Bungie is “deepening” its integration with its parent company, Sony Interactive Entertainment. Parsons said about 12% of Bungie’s remaining workforce will shift to internal positions at SIE within the next few quarters.

Additionally, Parsons said Bungie is working with PlayStation to “spin out” of its “incubation projects” to form a new studio within PlayStation to continue work on this game. This is an action game set in a brand-new “science-fantasy” universe,” Parsons said.

“This will be a time of tremendous change for our studio,” Parsons said.

How did Bungie get into the positions to have to make these dramatic changes? Parsons said its original plan was to have several “incubation” projects going on at the same time, each of which had senior development leaders working on them. But this approach didn’t work out.

“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,” Parsons aid.

Parsons also noted that Bungie’s plan to do this ran “headlong” into what he described as a “broad economic slowdown,” along with a “sharp downturn” in the video game industry overall, and Destiny 2: Lightfall failing to reach Bungie’s quality standards.

“We were overly ambitious, our financial safety margins were subsequently exceeded, and we began running in the red,” he said. “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.”

Following the layoffs and internal shifts, Bungie will have more than 850 employees who are working on Destiny and Marathon, Parsons said.

This dramatic action comes just after Bungie released Destiny 2’s The Final Shape expansion, which was positively received by fans.