The recession is continuing to hit the games industry hard, and now both Sony and Microsoft have announced major reductions and restructuring plans to deal with the financial downturn.
Kotaku reports that Microsoft is cutting 1,400 jobs today and plans to reduce another 3,600 over the next year and a half. Departments hit will be R&D, marketing, sales, finance, legal, HR, and IT. Microsoft didn’t give word if this will impact the Xbox division. Despite growth by the entertainment and devices division, of which the Xbox is a part, the company as a whole has seen an 11% drop in net income.
Meanwhile, Reuters gives word of a $2.9 billion operating loss for Sony, which has resulted in a restructuring plan for the company. This loss is more than double the $1.1 billion loss predicted earlier this month. Like Microsoft, it’s hard to tell how much this will directly impact the PlayStation division, but Sony’s sweeping structural changes include “headcount reductions,” as well as cuts to development and production costs for their various products. This doesn’t seem as dire as the reports that entire divisions would be shuttered, but it’s certainly not welcome news for Sony employees.
“While we are not immune to the effects of the economy, I am confident in the strength of our product portfolio and soundness of our approach,” said Microsoft CEO Steve Ballmer. Sony CEO Howard Stringer made similar comments, saying “While these are extremely challenging times, we must be fully prepared to embrace the opportunities that await us once these dark economic clouds begin to part.”