Sony Europe says lay-offs likely

Sony Computer Entertainment Europe boss David Reeves has issued an internal letter warning that up to 160 staff could be made redundant, citing a need to reduce the company's cost base, GamesIndustry.biz reports.

The letter, a copy of which has been received by GamesIndustry.biz, was read out at meetings yesterday. It begins, "SCEE has successfully faced a number of challenges throughout its history to become a leader of the videogame industry. However our industry is in the middle of a transition where some of the fundamentals of our business are changing.

"In order to further our market leadership we sometimes have to make difficult business decisions. The management of the company has concluded that we need to change our structure, streamline and strengthen our business operations - and that our cost base needs to be significantly reduced."

The letter goes on to state that this process has involved looking at all sectors of the business and identifying areas where structural changes can be made. It continues, "Regrettably, we must also now look at the possibility of making compulsory redundancies in the UK offices, in WWS studios in Europe and in our territory offices." Staff "across all areas of the business" are likely to be affected.

By close of business on Wednesday, SCEE will issue all members of staff with a letter informing them of whether or not they are at risk of redundancy. Individual consultations will then be held, covering "ways to avoid or reduce the number of people who are likely to be made redundant, and ways to mitigate the effects of any redundancies".

"In order to achieve the necessary cost reductions," the letter continues, "It is possible that there will be up to 160 redundancies in total across SCEE offices in the UK, WWS in Europe and in the Territories." SCEE currently employs around 1900 members of staff.

The letter goes on to say that SCEE is "committed to taking every possible measure to minimise the effect of any redundancies". It's made clear that the announcement itself "does not mean that anyone is being given notice to terminate their employment" as "these are proposals only at this stage".

Reeves concludes, "I also appreciate that what I have just announced will have come as a major and unwelcome shock, and it is something we have fought hard to avoid. However, the business targets that we face have regrettably made it unavoidable."