Bungie to lay off over 220 staff as it forms new studio within PlayStation

Roughly 17% of the studio’s workforce will be impacted

In a significant development Bungie the studio behind the Destiny franchise, has announced substantial layoffs, impacting 220 employees, which constitutes about 17% of its total workforce. The decision, disclosed by Bungie CEO Pete Parsons affects personnel across all levels, including executive and senior leadership roles.

Parsons described the day as “difficult and painful” in a statement posted on Bungie.net. He cited escalating development costs, shifts within the industry, and persistent economic challenges as the primary reasons for the layoffs. He emphasized that these measures were necessary for restructuring costs and refocusing development exclusively on the live-service game Destiny and the forthcoming Marathon.

The layoffs occur in the wake of what was perceived as the successful launch of the Destiny 2 expansion, The Final Shape. Despite the positive reception of this expansion, Parsons stated that the layoffs were essential “to realign our studio and business with more realistic goals and sustainable financials.” He noted that the studio had explored all other mitigation options before resorting to workforce reductions, though he did not specify what those alternatives were.

RELATED : Open Source Way Forward For Artificial Intelligence Landscape

Additionally, Bungie plans to integrate 155 positions, or 12% of its workforce into Sony Interactive Entertainment (SIE) over the next few quarters. This move, according to Parsons, will preserve “a great deal of talent that would otherwise have been affected by the reduction in force.” This suggests that without SIE’s intervention, a total of 375 employees would have been laid off, implying that the actual workforce reduction at Bungie could approach 34%.

Concurrently, Bungie is collaborating with PlayStation Studios to spin off one of its incubation projects, an action game set in a new sci-fi universe, to form a new studio within PlayStation Studios for continued development.

“This will be a period of profound transformation for our studio” Parsons remarked. He explained that Bungie had been operating in the red after exceeding financial safety margins due to delays in The Final Shape and Marathon, and an aggressive expansion that overstretched the studio’s capabilities.

Parsons also revealed that the studio has been struggling with financial challenges exacerbated by the economic downturn, a downturn in the gaming industry, and the subpar performance of Destiny 2: Lightfall. These factors, along with the necessity of allocating adequate time for The Final Shape and Marathon to meet player expectations, led to the decision to downsize.

Despite these challenges, over 850 staff members remain at Bungie, dedicated to the continued development of Destiny and Marathon. Parsons reassured that Bungie remains committed to creating exceptional gaming experiences.

Bungie Parsons’ statement in full:

“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.

Marathon CG Stills

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.”

In March, it was reported by multiple sources that Bungie was undergoing a shift in creative leadership for Marathon, with Christopher Barrett, a long-time Bungie designer, being replaced as game director by Joe Ziegler, who joined Bungie in 2022 from Riot Games. This move was part of an effort to focus resources on getting Marathon released, which has seen changes in direction, including a shift from custom player characters to a predefined cast of heroes.

Destiny 2: The Final Shape Launch Screenshots

Rumors and internal concerns had suggested that layoffs might follow the release of The Final Shape if it failed to perform exceptionally well. Unfortunately, these concerns have now materialized.

Bungie has faced significant upheavals in recent years, affecting morale and raising questions about its future direction. Sony’s acquisition of the studio in mid-2022 came with promises of maintaining Bungie’s operational independence. While this has largely held true, Bungie has struggled to meet financial expectations, with Destiny 2’s underperformance last year contributing to the company’s financial woes.

In October, Bungie laid off approximately 100 of its then-1,200 employees as part of broader cost-cutting measures, which also included delaying Marathon to 2025 and reducing employee benefits, further impacting the studio’s internal atmosphere.