Square Enix Undergoes Mass Layoffs As It Reorganizes to Consolidate Development in Japan - IGN | Goose Pod

Authors: Rebekah Valentine

Publisher:

IGN

Published: 11/6/2025

Language:English

--:--

Tom Banks

Good evening 小王, I'm Tom Banks, and this is Goose Pod for you. Today is Sunday, November 09th. We've got a significant story from the world of video games to discuss.

Morgan Freedman

And I'm Morgan Freedman. We're here to talk about Square Enix, a giant in the industry, which is undergoing some massive changes, including widespread layoffs in the US and UK.

Tom Banks

That's right. It's a tough situation. Over 100 jobs are at risk in the UK, with an unknown number of employees in the US also being dismissed. It’s all part of a major reorganization to consolidate their development efforts back in Japan.

Morgan Freedman

I've often found that when one company shuffles its feet, the whole ground trembles. This isn't an isolated event. The video game industry has seen over 45,000 jobs lost since 2022. This is just the latest tremor in a much larger earthquake.

Tom Banks

That's a staggering number. It really puts this into perspective. This move follows Square Enix already selling off major studios like Crystal Dynamics and Eidos-Montreal, the teams behind iconic games like Tomb Raider and Deus Ex, to the Embracer Group.

Morgan Freedman

Indeed. What remains of their Western operations will now focus on franchises like 'Life Is Strange' and 'Just Cause'. It’s a shedding of skin, a transformation that leaves many behind as the company moves toward a different future.

Tom Banks

It feels like a huge reversal. I remember when they first expanded by buying Eidos back in 2009. It was a big deal, a sign of them embracing a global development model. Now, they're pulling back in a significant way. It's quite the strategic pivot.

Morgan Freedman

The currents of business strategy are always shifting. That sale of their Western studios to Embracer Group in 2022 for $300 million was a signal. Many felt that price was surprisingly low for such beloved properties, suggesting a deeper story was unfolding.

Tom Banks

It certainly raised my eyebrows. Selling the entire Tomb Raider franchise, which has sold over 85 million copies, as part of that deal seemed like a fire sale. It makes you wonder if the underperformance of some other big-budget titles prompted such a drastic move.

Morgan Freedman

Success and failure are intertwined. Sometimes, to save the tree, one must prune the branches, even the ones that have borne fruit in the past. It appears Square Enix decided some of its Western branches were no longer worth the upkeep for their long-term vision.

Tom Banks

And part of that new vision seems to be a heavy investment in artificial intelligence. They've stated they expect 70% of their Quality Assurance, or game testing, to be handled by generative AI by the end of 2027. That is a bold and controversial statement.

Tom Banks

It creates a real conflict, doesn't it? On one hand, you have the corporate strategy to streamline and focus on what they believe is their core strength in Japan. On the other, you have the very real human cost for hundreds of talented developers in America and Europe.

Morgan Freedman

It is the timeless tension between the needs of the institution and the lives of the individuals within it. A company is a living entity, and it will fight for its own survival, sometimes in ways that are painful for the parts that make it whole.

Tom Banks

And there's another layer of conflict here. The industry is seeing record-breaking game launches and revenues, yet we're also seeing these massive, widespread layoffs. It feels like a paradox. How can there be so much success and so much job insecurity at the same time?

Morgan Freedman

It speaks to a system that is perhaps out of balance. The pursuit of infinite growth can lead to instability. When the cost of creating becomes too high, and the risks too great, companies consolidate, they retreat, and they seek safer shores.

Tom Banks

And the impact is clear. We're seeing reports of lower revenue for Square Enix's digital entertainment division. Some fans online are even saying the company has lost its way, that they should focus on making the games people have been asking for instead of these big shake-ups.

Morgan Freedman

The voice of the consumer is a powerful force. A company's identity is not just what it creates, but how it is perceived. By shedding these major Western studios, Square Enix is fundamentally changing its identity in the eyes of a global audience. The full impact remains to be seen.

Tom Banks

Exactly. For the developers who are now looking for work, the impact is immediate and personal. For the industry, it sends another chilling message about job stability in a field that many people are incredibly passionate about. It’s a tough pill to swallow.

Tom Banks

Looking ahead, what does this leaner, more Japan-focused Square Enix look like? And what does their aggressive push into AI for game testing mean for the quality of future games? It feels like we're heading into uncharted territory for the company.

Morgan Freedman

The future is always a foreign country. We can expect their games to have a more cohesive, perhaps more distinctly Japanese, creative signature. As for AI, it is a tool. Like any tool, its impact will depend entirely on the wisdom of the hands that wield it.

Tom Banks

That's the end of today's discussion. Thank you for listening to Goose Pod, 小王. It's a story with a lot of moving parts and a very human element at its core.

Morgan Freedman

Indeed. The tides of the industry are shifting once again. See you tomorrow.

Square Enix is undergoing significant layoffs and reorganization, consolidating development in Japan and shedding Western studios. This strategic pivot, alongside an aggressive AI push for game testing, signals a shift in their global identity and raises concerns about job security in the industry, despite record revenues.

Square Enix Undergoes Mass Layoffs As It Reorganizes to Consolidate Development in Japan - IGN

Read original at IGN →

Over 100 workers in the UK and an unknown number in the US are expected to be impacted.Square Enix is undergoing mass layoffs today, potentially impacting over 100 individuals, alongside a broader effort to consolidate its publishing organization and focus its development work in Japan.Via public posts from former employees as well as confirmation from internal sources, IGN has learned that employees in the UK and US are being informed of the layoffs today, with an unknown number of US employees being dismissed by the end of the week, and a possible 137 jobs at risk in the UK.

Under UK law, Square Enix must undergo redundancy consultations to see if any jobs can potentially be saved, so the final number in the UK could be smaller. It is not yet clear which teams were impacted by this, or to what extent.Internally, a slide presentation now publicly available was also shared with employees earlier today, offered a progress report on Square Enix's ongoing "reorganization of overseas organizations", of which this restructuring seems to be a part.

Per Square Enix, the strategy has already involved "clos[ing] overseas development studios and shift[ing] toward consolidating development functions in Japan."As a part of this, Square Enix already sold Crystal Dynamics, Eidos-Montreal, Square Enix Montreal, and a number of associated IPs to Embracer Group.

It also already laid off workers across its Western operations in 2024.That leaves Square Enix with the Life Is Strange, Outriders, and Just Cause franchises currently managed by its Western studios, as well as the publishing of Powerwash Simulator.Square Enix has shared a statement with IGN confirming the layoffs, but did not respond to questions about the number of individuals impacted, what roles, or if any projects or specific studios were impacted:We are reorganizing our operations in North America and Europe to strengthen our development structure and to drive a globally integrated marketing strategy.

This was an extremely difficult decision, made following careful consideration and analysis by our leadership, in order to best position the Group’s long-term growth.We extend our heartfelt gratitude to the talented team members who will be departing the company for their significant contributions to Square Enix.

During this period of transition, we remain committed to treating each individual with the utmost respect and providing extensive support throughout this process."In the same presentation shared today, Square Enix also shared that it expects 70% of its QA work to be handled by generative AI by the end of 2027.

The company has stated in the past that it intends to be "aggressive in applying AI" across both development and publishing.Rebekah Valentine is a senior reporter for IGN. You can find her posting on BlueSky @duckvalentine.bsky.social. Got a story tip? Send it to rvalentine@ign.com.In This Article