It seemed inevitable that layoffs were coming after SCEA posted a 1.9 billion dollar loss for Sony at the close of their fiscal year.
A recently dismissed employee inside SCEA had contacted Kotaku to give them the details. Apparently 80-100 employees have been shown the door from SCEA’s Foster City headquarters in California.
The layoffs started in the morning as the soon to be removed employees were asked one at a time into a meeting. They were given the typical layoff speeches and asked to hand in their badge and keys. They were not allowed to collect their belongings and had to have their manager do it for them or arrange a supervised after-hours appointment. The employees were basically laid off and walked to the door. The source, no longer with Sony, said they were given a fair severance package as part of their termination.
There were warning signs inside SCEA however that layoffs were coming. Starting with their mammoth 1.9 billion dollar loss mostly due to the Playstation 3, then the call for cutbacks, hiring freezes, and then surprise RIF’s. It’s a common pattern inside any business.
Kotaku contacted SCEA to comment on today’s layoffs and the spokesman gave this standard canned response:
“In an effort to accurately align the company to meet the changing needs of our consumers and of our industry, Sony Computer Entertainment America has found it necessary to analyze our current business and to restructure the company as necessary to continue our standing as the market leader. These restructuring efforts are currently underway and do include the streamlining of our operations and other initiatives to further strengthen the business, reduce costs and increase operational efficiency. "
One has to wonder how a price reduction on the Playstation 3 is going to affect SCEA’s losses. Has manufacturing the Playstation 3 dropped in price enough for Sony to drop the retail price without posting another massive loss for next year? The recent announcement of Sony dropping the price of it’s BluRay player to below the Playstation 3 could affect sales if they don’t price the products well. Some analysts say that Sony would need to drop the price of the Playstation 3 by at least $200 to have any type of positive impact on moving units.
It’s all shaping up to be another hard year for SCEA as Sony struggles to find it’s stride again.
