Bungie lays off workers as it forms new PlayStation studio

Bungie is making some drastic changes as it integrates more deeply into Sony and deals with the “rising costs of development and industry shifts,” according to a Wednesday announcement.

The company announced that it’s laying off 220 people — roughly 17% of its workforce — from every level of the company in what CEO Pete Parsons called a “difficult and painful day.”

Parsons explained that the layoffs are due to Bungie’s rapid expansion over the past few years (including during the pandemic), which negatively affected development on several incubation projects, its upcoming extraction shooter Marathon, and continued Destiny 2 support. Parsons writes:

For over five years, it has been our goal to ship games in three enduring, global franchises. To realize that ambition, we set up several incubation projects, each seeded with senior development leaders from our existing teams. 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.

Additionally, in 2023, our rapid expansion ran headlong into a broad economic slowdown, a sharp downturn in the games industry, our quality miss with Destiny 2: Lightfall, and the need to give both The Final Shape and Marathon the time needed to ensure both projects deliver at the quality our players expect and deserve. We were overly ambitious, our financial safety margins were subsequently exceeded, and we began running in the red.

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.

As a result, today we must say goodbye to incredible talent, colleagues, and friends.

All those laid off will receive severance, a bonus, and continued health coverage, Parsons says.

This all coincides with news about Bungie’s continued union with parent company Sony Interactive Entertainment. Not only will 155 roles, or 12% of Bungie’s workers, be integrated into SIE directly due to the downsizing, but the Destiny developer will be creating a new studio inside PlayStation Studios to work on an original action game set in a new sci-fi and fantasy universe. It’s unclear if this is the one of the three main projects Bungie was working on.

Sony acquired Bungie in 2022 for $3.6 billion in a move that would keep the studio independent. This purchase came amid Sony’s attempt to expand into live service games.

Bungie has been struggling over the past few years, having laid off around 100 people in November 2023 due in part to declining Destiny 2 sales. This forced the studio to delay projects, according to Bloomberg, including its most recent expansion, The Final Shape, which released in June with major issues like skipped cutscenes and server problems.