Square Enix is making significant changes as it restructures its Western operations, affecting its offices in the US and Europe. Reports suggest that numerous employees are facing uncertainty, with around 140 staff members in London at risk of redundancy. This move is part of a larger strategy to streamline operations and shift more focus back to Japan.
Restructuring and Layoffs
An internal video call delivered the news of these layoffs to employees, coinciding with Square Enix’s release of a progress report. In this document, the company outlined plans to have 70% of its Quality Assurance work managed by AI by 2027. Square Enix president Takashi Kiryu emphasized that the restructuring aims to make the company more “lean” and “agile,” with expected savings of 3 billion yen annually.
Consolidating Operations
The restructuring not only focuses on cost savings but also seeks to consolidate operations back to Japan. Square Enix aims to enhance its development capabilities by optimizing resource allocation and closing overseas studios. This reflects a broader trend among Asia-based developers like NetEase, which has also been closing international studios to focus development closer to home.
Industry Trends
NetEase, having successfully launched Marvel Rivals, has also downsized its California-based team and shut down two of its subsidiaries. Yesterday, Fantastic Pixel Castle closed with the withdrawal of NetEase’s support, followed by today’s shutdown of Toronto-based Bad Brain Game Studios.
Square Enix’s restructuring is a strategic move aimed at optimizing its global operations and centralizing development efforts in Japan.