Report: Square Enix U.S. and European divisions to suffer layoffs

Another major video game company has suffered layoffs in what is proving to be one of, if not the, toughest times in recent years for those working in the industry. This time it’s Square Enix’s turn, with the company announcing layoffs in its European and American divisions. Square Enix itself has yet to make an official statement.

The news, first reported by VGC, comes shortly after Square announced poor financial results compared to last year, in large part due to the cancellation of some unannounced video games. The move was to better align with the new long-term company strategy – dubbed “Square Enix Reboot and Awakening” – but resulted in a 70% profit deficit compared to the same period last year.

Exactly what these games are remains a mystery, but the release of this information appears to be a tidal wave that follows closely behind this wave of layoffs at Square Enix. The news was revealed to employees via a company-wide town hall meeting, where president Takashi Kiryu said employees from publishing, IT and Square Enix’s Collective indie games division will be the most affected next month. The exact number of layoffs has not been confirmed.

Square Enix president Takashi Kiryu has always been keen to pursue new approaches and strategies for the company. It wasn’t until earlier this year that he announced in a New Year’s letter to the world that the company would “aggressively” use artificial intelligence in future video games. We’ve seen AI used to a small extent in Foamstars, but we haven’t seen any major use in Square Enix games.

Perhaps more importantly, these layoffs come shortly after Square Enix sold many of its Western studios and IP to Embracer Group. The studios responsible for games such as “Deus Ex” and “Tomb Raider” were subsequently caught in the hurricane of Embracer’s continuous layoff spree. Eidos Montreal was particularly hard hit, losing 100 employees, a “Deus Ex” The Siege game was also cancelled. So Square Enix’s Western division has certainly been hit pretty hard, including by this news.

This rollercoaster of layoffs and studio closures appears to show no end in sight. In an industry filled with recently laid-off developers, you have to wonder how much talent will stick around until new opportunities arise, and how much talent might be lost forever.