Bungie Layoffs of 2023

The Bungie layoffs of 2023 occurred on October 30, 2023. A total of 8% of the company, around 100 employees, were laid off as a result of Destiny 2's declining performance, the "quality miss" of its Lightfall expansion, the general economic slowdown, and internal development issues with Bungie's upcoming shooter, Marathon.

As a result of the layoffs, Marathon was delayed to 2025, and Destiny 2's next expansion, The Final Shape, was delayed by three months from February 2024 to June.

Background

On the morning of October 30, 2023, Bungie employees started posting on their social media accounts that they had been laid off, with more reports and updates throughout the day. Employees were not told ahead of time and found out in real time with a 15-minute meeting put on their calendars. Employees from the community, social, player support, marketing, legal, recruiting, art, human resources, quality assurance teams, and other teams, were let go, including multiple members of the company’s diversity committee and accessibility inclusion club.

“It’s definitely weird, being the one who is laid off based off the decisions and performances of people in departments you’re not involved with,” one impacted employee told IGN. “Being deemed expendable hurts.”

In total, it was reported that 8% of the company, which was around 100 employees, had been laid off. Multiple employees claimed that internally, Bungie leadership tried to obfuscate the numbers and departments of those impacted while discouraging employees from asking questions on these topics in company chats.

Paul Tassi of Forbes reported that those laid off would receive three months of severance and Bungie-paid COBRA health insurance, but other benefits would only last until the end of the month. Tassi also reported th

According to a report from Rebekah Valentine of IGN, Bungie CEO Pete Parsons cited Destiny 2‘s declining performance in 2023 as a cause. Parsons responded to the layoffs, seemingly after the layoffs ended, expressing sadness that those at Bungie had to say goodbye to their colleagues and that their contributions were enormous.

IGN also reported that many employees on the QA team had been let go in the weeks and months leading up to the layoffs, making the number of impacted employees larger than reported. The number of departures was noticeable enough internally that the company's head of QA sent out an email to staff members addressing the situation, claiming that the dismissals “were not layoffs and not a result of cost cutting in any way,” adding that “if we ever did layoffs, we would be very upfront about it.” It was reported that the dismissals were a result of Bungie cracking down on QA, with increased job responsibilities and multiple people being placed on performance improvement plans (PIPs) for seemingly minor infractions. IGN said that employees perceived a growing hostility from team and company leadership, including a meeting in which QA was said to be referred to by leaders as “non-developers.” It was reported that over 10% of of the QA team had either been fired or laid off between early October and early November.

A report from Bloomberg's Jason Schreier reported that about 1200 employees remained at the studio, and noted that Bungie’s upcoming projects were internally delayed as part of the move, with The Final Shape quietly moving to June 2024 due to internal feedback that the expansion was "good but not great." Schreier also reported that the layoffs came several weeks after a meeting where executives were informed that Bungie's revenue was 45% off target of projections as a result of player's leaving Destiny 2 after its latest expansion, Lightfall, was poorly received.

In the meantime, Parsons told staff Bungie would be cutting costs, such as for travel, as well as implementing salary and hiring freezes. When asked by employees if leadership had taken pay cuts in an attempt to save jobs and avoid layoffs, they were told no and that Bungie "wasn't that kind of company." Although, Parsons and some other executives previously forfeited annual bonuses before the layoffs.

The "Destiny 2 Dev Team" posted a Bungie.net article on November 2 entitled "Our Path Forward." In the article, they said this week "has been one of the most difficult weeks in our studio’s history," and that they had heard about player fears for the future of Destiny 2, promising to share short-term updates over the coming weeks. Later in the month, the team confirmed reports that The Final Shape had been delayed until June 4, 2024.

In an internal town hall meeting, it was reported that Parsons allegedly told remaining employees that the company had kept “the right people” to continue work on Destiny 2, and that Marathon had been delayed until 2025. Parsons said that Bungie took responsibility for the layoffs and that Sony was not involved in the decision. Bloomberg reported that the layoffs were a result of a larger money-saving initiative at PlayStation, which also laid off employees at studios such as Naughty Dog, Media Molecule and its San Mateo office.

A former employee told IGN that they [Bungie staff] were repeatedly assured that there would be no layoffs as a result of Sony's acquisition of Bungie in 2022. A Sony quarterly report mentioned that $1.2 billion of the $4 billion acquisition was going explicitly toward staff retention. Forbes reported that Some employees felt frustration that the company had spent a lot of money to upgrade their brand-new headquarters in Bellevue, although Forbes reported that the new building was a separate project and wouldn't have saved many jobs due to when the project was drafted and work was started.

Multiple employees expressed frustration about the layoffs, saying they felt that the decisions leading to the company’s apparent money struggles were out of their hands, and that those who were laid off were being punished for a problem they largely did not cause. IGN reported that several employees said that leaders within Bungie reiterated across multiple meetings that they couldn't guarantee there wouldn't be more layoffs in the future, with chief people officer Holly Barbacovi outright stating that layoffs were a “lever” the company would pull again.

Aftermath

Pre-Order Cancellations

After the layoffs occurred, players began refunding their pre-orders in protest. Pre-orders for Xbox and PlayStation platforms were cancelled by the platforms themselves when Bungie officially delayed The Final Shape from February to June 2024.

Cost-Cutting Measures

In the weeks following the layoffs, IGN reported that the layoffs and other cost-cutting measures were an attempt by the studio's leadership to avoid a total Sony takeover. Bungie's board of directors is made up of PlayStation Studios head Hermen Hulst, Sony senior VP Eric Lempel, Bungie co-founder Jason Jones, Bungie CTO Luis Villegas, and Bungie CEO Pete Parsons. It was reported that the current board structure is contingent on Bungie meeting certain financial goals, and if Bungie failed to meet them, Sony would be allowed to dissolve the existing board, replace it with their own board, and take full control of Bungie.

Cost-cutting measures occurred soon after the layoffs. including a studio-wide hiring freeze, reduced travel budgets, elimination of holiday bonuses, canceling and reducing numerous morale events, including the company's Pentathlon and Bungie Day celebrations, and pausing or fully ending benefits like market rate employee compensation adjustments, the "new hire" lunch program, employee donation matching, its peer recognition program, and gift cards for employees birthdays.

Morale

Employee morale was reported to be "soul-crushing" mixed with frustration and sadness, and management at the company showing indifference or even outright flippancy or hostility. Several employees said that leaders within Bungie reiterated across multiple meetings that they couldn't guarantee there wouldn't be more layoffs in the future, with chief people officer Holly Barbacovi outright stating that layoffs were a “lever” the company would pull again.

“We know we need Final Shape to do well,” one source told IGN. “And the feeling at the studio is that if it doesn’t we’re definitely looking at more layoffs.”

Additionally, many employee leaders within the company were laid off, particularly from Bungie’s DE&I clubs, including co-heads of Pride@Bungie, Women@Bungie, and Accessibility@Bungie. Many employees fear that these and many clubs will eventually be shut down.

Outsourcing

In the weeks and months leading up to the layoffs, many members of Bungie's quality assurance team had been let go. IGN reported that there had been a culture shift to use a general pool of testers in-house and through outsourcing.

Rise of Cheaters

Content creators began sharing experiences where they were encountering more cheaters in Destiny 2 after the layoffs. Forbes had reported that some of the security team at Bungie had been laid off, but it was unknown how many were impacted. According to Liana Ruppert, former community manager, Bungie probably shouldn't have laid off "a significant portion of their security team" in response to content creator GernaderJake sharing that five matches they had plaid in out of eight had cheaters in them.

July 2024 Layoffs

On July 31, 2024, Bungie announced that it would eliminate 220 jobs - 17% of its workforce - as part of a wider reconstruction, which saw Bungie further integrate into parent company Sony. Roughly 155 positions within Bungie - 12% of its workforce - moved under Sony. This left Bungie with around 850 employees. As a consequence, an incubation team within Bungie was spun-off into PlayStation Studios; the team was working on an action video game set in an original science-fiction setting, codenames Gummybears.