Sony Online lays off hundreds, cancels Agency

Last July, Sony Online Entertainment cut 4 percent of its workforce. Now, if reports are correct, the layoffs are continuing…at a heftier rate.

As has become somewhat common with game industry layoffs, the news was first reported by 3D Realms president George Broussard on his Twitter feed. Broussard initially reported yesterday that SOE Seattle was undergoing layoffs and The Agency studio may even be closed. Within hours, he followed that up with word that the layoffs expanded beyond the Seattle shop and that multiple SOE studios would be closed today, with Denver among the rumored cuts.

As of press time, representatives with Sony and Sony Computer Entertainment had not responded to GameSpot's request for comment or clarification on the matter.

However, gaming blog Kotaku cites "a source familiar with the matter" as saying Sony Online Entertainment has closed three entire studios, laying off one-third of its staff in the process. The studios reportedly shut down are Sony's branches in Denver, Co.; Tucson, Ariz.; and Seattle, Wash. Additionally, Kotaku reports that half of the workforce at SOE's Austin, Texas branch were given the pink slip, as well as a "sizeable" portion of Sony's San Diego, Calif., studio.

The news comes in the wake of two major launches for Sony Online Entertainment. In January, the company released DC Universe Online--SOE's fastest selling game of all time--after more than five years in the works. Additionally, the publisher launched its free-to-play online game Free Realms on the PlayStation 3 earlier this week.

This would be the third major round of layoffs at SOE in as many years. In July of 2009, the company let 41 staffers go, barely a month after Free Realms' original PC launch. That downsizing eliminated 5 percent of the company's workforce, or 41 positions.

Broussard has proven regrettably accurate when tweeting about the latest layoffs in the game industry. In the past year alone, the 3D Realms veteran has been among the first to detail developer downsizings at LucasArts, IO Interactive, EA Canada, and Black Box, among others.

[UPDATE]: Sony Online Entertainment confirmed for GameSpot today that it is closing the Seattle, Tucson, and Denver studios, and is shedding 205 positions in the process. The long-in-development online game The Agency has also been canceled. SOE's full statement follows below:

As part of a strategic decision to reduce costs and streamline its global workforce, SOE announced today that it will eliminate 205 positions and close its Denver, Seattle and Tucson studios. As part of this restructuring, SOE is discontinuing production of The Agency so it can focus development resources on delivering two new MMOs based on its renowned PlanetSide and EverQuest properties, while also maintaining its current portfolio of online games. All possible steps are being taken to ensure team members affected by the transition are treated with appropriate concern.

This strategic decision will have no impact on SOE's current portfolio of live games; additionally SOE will transition development efforts for the Denver and Tucson studios’ suite of products to its San Diego headquarters. This strategic alignment of development resources better positions SOE to remain a global leader in online gaming and deliver on its promise of creating entertaining games for players of all ages, and servicing the 20 million players that visited SOE servers in just the past year.