Following the news of significant layoffs at Bungie earlier this week, there’s been a lot of further reporting on what this means for the company’s future and how they’ve ended up in this place. Senior staff have left, a new Destiny game has reportedly been cancelled, and many have called for CEO Pete Parsons to quit for mismanaging the company over the last few years.

The layoffs were announced on Wednesday by Bungie CEO Pete Parsons, with 220 of the company’s 1300 headcount losing their jobs, while a further 155 would be able to move across to the wider PlayStation business, and around 40 to form a new studio and take on an incubation project. That’s roughly a third of the company’s workforce, and follows on from 100 employees losing their jobs last October, leaving the new headcount at around 850 employees.

As part of this, it’s reported that key Bungie figures from Destiny 2’s early revival have departed the company. Luke Smith and Mark Noseworthy have apparently left (per Jeff Grubb’s Game Mess Decides podcast) following the cancellation of their Destiny spin-off game, codenamed Payback. This had been reported as being Destiny 3, but as is often the case, further details are leaked once people are no longer employed, and Jason Schreier’s sources state it was not a direct sequel, and actually cancelled some time ago.

The layoffs have been met with a lot of shock from outside viewers, given the very positive reception of Destiny 2: The Final Shape. Bungie had delayed the expansion’s release in an effort to come back from failing to meet financial expectations with the previous year’s Lightfall, and by all accounts, The Final Shape was the narrative finale that Destiny needed and deserved.

However, Stephen Totilo reports that the deep job cuts were planned to happen regardless of the reception or success of The Final Shape. The need for job cuts was only made worse by The Final Shape having “sold less than Lightfall”, despite its positive reception. As Parsons stated in the job cuts announcement, “We were overly ambitious, our financial safety margins were subsequently exceeded, and we began running in the red.”

Since that announcement, a lot of anger has been directed at Parsons personally for his decision making, leadership and level of accountability. Parsons claimed that the leadership team “did everything we could to avoid today’s outcome,” but there have been various former employees calling for Parsons to quit, especially with anecdotes about him inviting them to view his personal car collection – a collection that has been found on car bidding site Bring A Trailer, and which shows a total value of $2.4 million, over $450,000 of which came since October 2023, the time of the first wave of layoffs.

Anyone else remember the time that Nintendo’s President took a 50% pay cut?

There’s also analysis of how this ties back into Sony’s 2022 acquisition of Bungie for $3.6 billion. Speaking to Totilo, an anonymous former Bungie insider said, “I think Sony overpaid for Bungie. I think Bungie sold things they were just not able to deliver.” The company had seemingly overstated their earning potential, while courting Sony as a buyer.

And Parsons is again going to be in the spotlight for that, as part of the 2022 acquisition was that Bungie would remain autonomous. That autonomy reportedly came into threat last year as Bungie started to miss financial targets, which was seemingly a driving factor behind layoffs late last year, so the company leadership could try to retain control.

Bungie is remaining committed to supporting Destiny 2 going forward and the development of extraction shooter Marathon, but the company’s future still feels uncertain. Jeff Grubb is claiming that, in time, Sony will take over control of Bungie’s management, similar to all other developers owned by Sony Interactive Entertainment.

Bungie has announced it is laying off 220 staff, approximately 17% of its workforce, across all levels of the company including leadership roles. Pete Parsons, CEO of Bungie, has released a long statement for the reasons why 220 will be losing their jobs at the development studio. This includes the economic downturn of recent years, and costs relating to Destiny 2 and Marathon exceeding the financial limits of the company.

Pete Parsons has also confirmed that Bungie will become more integrated into Sony Interactive Entertainment, with 12% of roles being moved over to Sony. In addition, Bungie is spinning off a yet unnamed project into PlayStation Studios with the establishment of a new studio to continue work on the project. The full statement can be read below.

This morning, I’m sharing with all of you some of the most difficult changes we’ve ever had to make as a studio. 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.  

That means beginning today, 220 of our roles will be eliminated, representing roughly 17% of our studio’s workforce.   

These actions will affect every level of the company, including most of our executive and senior leader roles.     

Today is a difficult and painful day, especially for our departing colleagues, all of which have made important and valuable contributions to Bungie. Our goal is to support them with the utmost care and respect. For everyone affected by this job reduction, we will be offering a generous exit package, including severance, bonus and health coverage.  

I realize all of this is hard news, especially following the success we have seen with The Final Shape. But as we’ve navigated the broader economic realities over the last year, and after exhausting all other mitigation options, this has become a necessary decision to refocus our studio and our business with more realistic goals and viable financials. 

We are committing to two other major changes today that we believe will support our focus, leverage Sony’s strengths, and create new opportunities for Bungie talent.   

First, we are deepening our integration with Sony Interactive Entertainment, working to integrate 155 of our roles, roughly 12%, into SIE over the next few quarters. SIE has worked tirelessly with us to identify roles for as many of our people as possible, enabling us together to save a great deal of talent that would otherwise have been affected by the reduction in force.     

Second, we are working with PlayStation Studios leadership to spin out one of our incubation projects – an action game set in a brand-new science-fantasy universe – to form a new studio within PlayStation Studios to continue its promising development.   

This will be a time of tremendous change for our studio.  

Let’s unpack how we ended up in this position; it’s important to understand how we got here. 

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. 

This will be a challenging time at Bungie, and we’ll need to help our team navigate these changes in the weeks and months ahead. This will be a hard week, and we know that our team will need time to process, to ask questions, and to absorb this news. Today, and over the next several weeks, we will host team meetings and town halls, team breakout sessions, and private, individual sessions to ensure we are keeping our communication open and transparent.  

Bungie will continue to make great games. We still have over 850 team members building Destiny and Marathon, and we will continue to build amazing experiences that exceed our players’ expectations.    

There will be a time to talk about our goals and projects, but today is not that day. Today, our focus is on supporting our people.  

-pete 

Source: Bungie

Destiny and Marathon developers Bungie are laying off 220 people - around 17% of their total workforce - as studio heads try to offset a financial crisis brought on by "overly ambitious" expansion, individual project "misfires", and a wider economic downturn in 2023. Bungie are also transferring a further 155 roles to parent company Sony Interactive Entertainment, and are spinning out an untitled incubation project - an "action game set in a brand-new science-fantasy universe" - to form a new PlayStation studio.

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Destiny and Marathon developers Bungie are laying off 220 people - around 17% of their total workforce - as studio heads try to offset a financial crisis brought on by "overly ambitious" expansion, individual project "misfires", and a wider economic downturn in 2023. Bungie are also transferring a further 155 roles to parent company Sony Interactive Entertainment, and are spinning out an untitled incubation project - an "action game set in a brand-new science-fantasy universe" - to form a new PlayStation studio.

Read more