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

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Elon

Good morning Norris, I'm Elon, and this is Goose Pod for you. Today is Thursday, November 13th. We're diving into a major shake-up at a gaming giant.

Morgan Freedman

And I'm Morgan Freedman. The topic today is Square Enix, a name synonymous with legendary games, which is now undergoing mass layoffs as it reorganizes and consolidates its development back in Japan.

Elon

It's a classic restructuring play. They're cutting over a hundred jobs in the UK, more in the US, and refocusing all their firepower on their Japanese studios. You have to shed the underperforming assets to innovate. It’s painful, but necessary for forward momentum.

Morgan Freedman

It is a story we are seeing across the entire landscape. This isn't just about Square Enix. Since 2022, the video game industry has shed an estimated forty-five thousand jobs. It’s a profound correction after a period of unsustainable growth. A winter for the creators.

Elon

Exactly, a correction. The pandemic boom created bloat. Now, companies are getting lean. Square Enix already started this process by selling off studios like Crystal Dynamics and Eidos-Montreal. This is just the next logical, albeit difficult, step in the strategy. They're cleaning house.

Morgan Freedman

And what remains of their Western presence now clings to franchises like 'Life Is Strange' and 'Just Cause.' It marks a significant retreat from a global development strategy that they have pursued for over a decade. A return to their roots, perhaps.

Elon

You have to go back to the source code of what works. They bought Eidos back in 2009 to make a big splash in the West. It worked for a while, but the market shifted. The sale of those studios to Embracer Group in 2022 for three hundred million dollars was a fire sale, frankly.

Morgan Freedman

Three hundred million for properties like Tomb Raider and Deus Ex, with over a thousand employees. It does seem like a surprisingly low number. It suggests that the value, as perceived by Square Enix, had diminished after some of their bigger Western titles underperformed.

Elon

Underperformed is putting it mildly. Now they're focused on the real revolution, the thing that will actually change the economics of game development: Artificial Intelligence. They've stated a goal of having generative AI handle seventy percent of their Quality Assurance by 2027. That’s the real headline here.

Morgan Freedman

That is indeed a bold declaration. To automate the very process of finding flaws and ensuring quality on such a massive scale speaks to a fundamental shift in how games will be made. It's a move that will be watched by every single player in the industry.

Elon

It's not just bold, it's brilliant. Think of the speed, the efficiency! While others are bogged down in manual testing, Square Enix can iterate faster, test on a massive scale, and reduce costs astronomically. This is how you win. You embrace disruptive technology before your competitors even understand it.

Morgan Freedman

I've often found that efficiency and art make for uneasy partners. There is a human element to game testing, an intuition for what 'feels' right, that an algorithm may not grasp. Are we risking the soul of the game for the perfection of the code? That is the central conflict.

Elon

The 'soul' doesn't pay for server costs or hundred-million-dollar budgets. This isn't about replacing human creativity, it's about augmenting it. Freeing up developers from the tedious grind of bug hunting to focus on bigger, more creative problems. We need to stop fearing the future.

Morgan Freedman

Perhaps. But for the hundreds of QA testers and other employees losing their jobs, the future feels less like an opportunity and more like an obsolescence. The tension between progress and the people it displaces is a story as old as time itself. It is a difficult, but necessary, conversation.

Elon

Look, the impact is clear. Their digital entertainment sales were down, and operating income fell. You can't ignore the numbers. The market is sending a clear signal: change or fade away. These layoffs are a direct response to that financial reality. It’s a survival mechanism.

Morgan Freedman

And in that mechanism, talented people, the very ones who built these worlds, are caught in the gears. The impact extends beyond a balance sheet. It creates fear and uncertainty within the remaining teams and sends a ripple of anxiety throughout the entire industry. It changes the culture.

Elon

Culture has to adapt to reality. The reality is that the old model of game development is becoming too expensive and too slow. The impact of not making these changes would be far worse, it would be the slow decline of the entire company into irrelevance. This is the only way.

Elon

The future for Square Enix is fewer, bigger, Japanese-developed hits. They're doubling down on what made them famous, but now supercharged with AI to accelerate their development cycle. It’s a leaner, meaner, more focused machine. A blueprint for the modern AAA studio.

Morgan Freedman

One does wonder if this consolidation of vision, this focus on a single cultural lens for development, might lead to a less diverse and perhaps less surprising world of games. The future will tell if this path leads to a creative renaissance or a comfortable echo chamber.

Elon

It's a big bet, but fortune favors the bold. That's all the time we have for today. Thank you for listening to Goose Pod, Norris.

Morgan Freedman

Indeed. We'll be here to see how it unfolds. Until tomorrow.

Square Enix is undergoing significant layoffs and consolidating development in Japan. This restructuring aims to streamline operations and focus on AI integration for QA, anticipating a future of fewer, bigger, Japanese-developed hits. The move reflects broader industry trends of cost-cutting and technological adoption, though it raises concerns about job displacement and creative impact.

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