Layoffs hit Sony's PlayStation unit

At least 80 employees in Sony Computer Entertainment of America's Foster City, California PlayStation unit have been laid off, according to a report in the popular video game blog, Kotaku.

But Kotaku quoted SCEA spokesman Dave Karraker as saying, "In an effort to accurately align the company to meet the changing needs of our consumers and our industry, (SCEA) has found it necessary to...restructure the company as necessary to continue our standing as the market leader."

And in an email to CNET News.com, Karraker confirmed the report Wednesday morning.

Given Sony's troubles--the much-hyped PlayStation 3 is currently in last place among next-generation video game consoles, trailing Nintendo's Wii and Microsoft's Xbox 360--Karraker's comment about SCEA trying to maintain its position as "market leader" is being laughed at by some. Still, the company's PlayStation and PlayStation 2 were world-beaters, and the PS2 is still a best-seller.

Kotaku reported that Karraker would not comment on the number of employees affected, which the blog put at "roughly 80 to 100," according to a source who was among those laid off.

Those who lost their jobs were asked to leave immediately and "either have their manager pack up their desk for them or schedule an appointment some evening to fetch their possessions," Kotaku wrote.

[aka_tripleB]

It doesn't sound like they were laid off

Most people who are laid off are allowed to pack up their things before they leave. It's sounds more like they were fired, and Sony doesn't want these people to do any more damage to the company.

Sure, there are some occasions where they ask people to just leave, but how often does that happen?

[bob donut]

No, it's a layoff

Basically, the department got fired, not the individual employees. At least that's how I read it. Unfortunately, whether it's personal or not, the individual employees are still out of jobs. Don't read anything into the way the firing was handled, that has more to do with how callous or warm the local HRs are.

A frustrating thing for the engineers that worked on the PS3 is that it's a decent machine, but it doesn't reflect the market's needs. hopefully they (worker bees) won't be faulted too much when they interview at other companies. The managers however... that's another story.

[umbrae]

Obviously, you have never witnessed a layoff...

Precautions are always taken. People get upset when they loose their jobs, and are not usually allowed to go back to their desks without supervision. Most likely Sony laidoff so many, they did not have enough security guards to watch over them all.

[ZeroJCF]

Shades of Early Apple...

Apple II (PS2) The big hit of the company and the only unit creating revenue. The Macintosh (PS3), had all this fanfare, all this glitz, but not what the market needed at the time. The PS3 will live of the money that the PS2 brings in is possible that it will not bring in positive cash until the very end. Now the layoffs.

This is going to hurt, especially since it is now in third place and this is their console for at least the next 3-4 years. Sorry Sony, Not everyone has the dough to have HDTV(have you seen the PS3 on a regular TV? Yuk), not everyone can shell out $600+ for a game console. There are more lower-class income then middle-class, and both are more than the higher class.

Bottom Line:
Wii is fun, cheap, and works great with exisiting/legacy TVs. Xbox 360 is fun, cheap(PS3 compared), and works great with existing/legacy TVs. PS3 is expensive, has no games, and does not looks ok on newer sets, but not older TVs.

[gkflyboy]

What?

What does a computer company have to do with a video game entertainment company?

sounds like a Wintel fanboy...

[oxtail01]

senseless comments

what the hell are you talking about? PS3 will run PS3 and older PS2 games which will look just as good as it ever did on existing TV. You only need new TV to fully exploit the PS3 graphics. Yes, it's expensive but you're not comparing on the same basis. the real problem is that there are not enough compelling games for the system yet.

[Jake Leone]

SONY, you can revive your system, by taking a small gamble.

A little history will help people understand what is happening. Read up on SEGA, and you'll see that the Japanese push hardware onto the platform will little regard for consumer needs or sentiment.

Games systems are more about families and family budgets, than anything else. Violate that principle, and your system will sink (if the competitors beat you to the punch,and they have).

When the new unit fails, and drags the company down, the U.S. units are the first to get the axe.

It's very ironic and foolish policy, because often the U.S. units are the only thing that props the company up, as the U.S. units are (typically) heavily involved with software development.

The company (then SEGA), now Sony, goes through several years of billion dollar losses, because the Japanese management hangs onto the hardware to the last.

SONY needs to correct this path quickly, get rid of the PS3 or lower its cost dramatically, lay blame clearly where it lies. It lies with a zealous Japanese management that pushes hardware/(chip sales) over consumer sentiment and software variety.

Recover by keeping your franchise software titles alive and well supported. Do everything you can to bring down the cost of the current system.

It only takes a few good titles to re-prop a system (Donkey Kong and Nintendo). And the cost/risk is really minimal. In fact 50 million spend on software (at this point) could save 500 million in hardware sales.

It also doesn't hurt to copy the competition, so copy Nintendo's killer peripheral en masse.

Believe me a few killer titles, and about 300$ less in cost for the PS3, could revive SONY. But Japanese management needs to be ready to accept criticism and humble itself to the consumer.

SONY, you are going to lose a couple of billion, at this point gambling a few hundred million is fine. In fact it might save you, and the consumer will appreciate your efforts.