Layoffs Will Not Affect Sony's Gaming Business

David Reeves, the president of Sony Computer Entertainment Europe, said that the recently announced staff cuts at Sony would not in any way affect the PlayStation division, either in the hardware or in the software divisions.

Sony announced that 8,000 employees would be fired over the course of 2009, which is about 4% of the workforce it currently uses. Also, the agreements with about the same number of contractors will not be renewed in an effort to save more than 1.1 billion dollars in operating costs. Part of the statement regarding the lay offs stated that Sony would “carefully review and make structural changes” related to the PlayStation division.

David Reeves talked to a Dutch television station and revealed that the people working in the videogames development are an investment and an asset that could not be ditched without putting the final product at stake.

Reeves said that “Sony live and die on the innovative projects they bring out. In our division, we're still continuing to develop the products which we put in our mid-range plan six months ago, one year ago.” Cutting staff while development is still ongoing on various projects would be foolish, as it would undoubtedly affect the quality of games. He added that “As long as we plan prudently, I think we will be fine. We have a good business model. People will continue to buy the hardware, continue to buy the software. I'm convinced of it.”

At the moment, the hardware side of the PlayStation division is not doing extremely well, with the PlayStation 3 losing the battle with the Xbox 360 from Microsoft and with the Nintendo Wii. Hardware sales should have the success of videogame sales, Sony’s main revenue source. The first major gaming release of 2009 for the PS3 is Killzone 2, arriving in February.