An unverified number of employees will be laid off from Square Enix as part of the company’s restructuring. The video game developer and publisher disclosed this to staff during an internal meeting on Monday.
Those who attended the meeting said President Takashi Kiryu confirmed that both the European and American arms of the company will be hit by layoffs over the next month. Although the publisher did not share the size of the layoff, those in attendance were informed that those working in IT, publishing, and Square Enix’s Collective indie games division will be mostly impacted.
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The layoff announcement coincided with the publication of the company’s quarterly financial results where the company said it plans to “rebuild overseas business divisions from the ground up” and has “begun optimizing costs at its European and American offices via structural reforms”.
Since being appointed president in June 2023, Kiryu has been on the path of reforms, overseeing large-scale reorganization of Square Enix’s development efforts. His ultimate goal is to reverse the company’s recent poor game sales—even with their biggest titles.
Following the layoff announcement, VGC learned that the company’s main Slack channels were locked. Those that will be impacted by the layoffs will be notified this week. While US employees may exit their roles before June, their counterparts in the UK will enter a one-month consultancy period in line with the country’s labor law.
According to a Bloomberg report, the Japanese arm of Square Enix recently promoted a new group of creators to its executive offices and is placing strict rules that will monitor how much influence producers have on individual projects.
Square Enix plans to make its AAA games multiplatform
As part of its financial report, Square Enix also unveiled a new medium-term business plan which shows its intention to make its AAA titles multiplatform henceforth. The plan was tagged “Square Enix Reboots and Awakens”.
The plan included a three-year strategy which the publisher hopes will translate into “long-term growth”. In the latest financial results, Square Enix recorded a 70% drop in profit compared to the same time last year due to “the recognition of ¥22,087 million ($141 million) in losses on disposal of content as an extraordinary loss”.
The losses were related to the cancellation of projects that didn’t align with the company’s future strategies. Perhaps, the canceled games were tied to one platform or relied heavily on external developers.
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By targeting multiplatform development, Square Enix hopes to “build an environment where more customers can enjoy our titles in regards to major franchises and AAA titles, including catalog titles”.
Final Fantasy 16, Final Fantasy 7 Remake, and Final Fantasy 7 Rebirth all launched as PS5 exclusives. It is claimed that sales of the company’s latest release in the series (Final Fantasy 7 Rebirth) was underwhelming.
In recent years, the relevance of exclusivity of games has come under serious scrutiny. Xbox is increasingly bringing its exclusives to rival platforms. Sony adopted a similar strategy with the release of Helldivers 2 on PS5 and PC. While exclusivity is great for console sales, it hurts sales numbers and ultimately limits the potential earnings of the developer.
