One month after a major round of layoffs impacted roughly 100 Bungie employees of 1,200, those remaining at the Destiny developer say the cuts, as well as other cost-cutting measures, came alongside an apparent scramble by studio leadership to avoid a total Sony takeover.
As it currently stands, Bungie is (on paper) a fully independent subsidiary of Sony. But its board of directors has been divided since the takeover in July of 2022. Among its current members are PlayStation Studios head Hermen Hulst, Sony senior VP Eric Lempel, Bungie co-founder Jason Jones, Bungie CTO Luis Villegas, and Bungie CEO Pete Parsons. The board as a whole is split between Sony and Bungie representatives, with Parsons serving as a tiebreaker vote. But speaking to IGN under condition of anonymity, multiple current and former Bungie employees described a department meeting that took place shortly after the layoffs, in which leaders hinted that this shared power may not last forever.
Sony did not respond to IGN’s request for comment on this piece. Bungie declined to comment.
Declaration of Dependence
While the exact details of Sony’s deal to acquire Bungie remain unknown to the public or employees, sources say they were told by leaders that the current split board structure is contingent on Bungie meeting certain financial goals. If Bungie falls short of certain financial goals by too great an amount, Sony is allowed to dissolve the existing board and take full control of the company. And with Destiny 2 expansion The Final Shape delayed into the next fiscal year and Bungie still investing heavily on Marathon, many employees understand that Bungie is struggling to meet the necessary targets to keep its last vestige of freedom. Such a takeover wouldn’t necessarily be shocking given its 2022 acquisition, but it would nevertheless be a stunning development for a company that has historically prided itself on its independence.
It was with this threat looming that Bungie leadership – not Sony, according to Parsons – made the choice to lay off roughly 100 employees last month. But the cost-cutting at Bungie isn’t limited to just personnel. Multiple current employees confirmed to IGN that the company has implemented numerous other cost-cutting measures recently, including a studio-wide hiring freeze, reduced travel budgets, elimination of holiday bonuses, keeping its annual Bungie Day virtual, delaying its weeklong company “Pentathalon” event to next December, and reducing numerous morale events such as cooking and knitting classes from monthly to quarterly. Bungie is also pausing or fully ending benefits like annual employee compensation adjustments to meet market rates, its new hire lunch program, employee donation matching, its peer recognition program, and gift cards for employees birthdays. And yearly studio performance bonuses this year will only be the contractually obligated 80% minimum, after being above 100% for good performance several previous years running.
Along with the recent layoffs, this has resulted in a massive decay in morale within the company, according to IGN’s sources, one of whom told us that the mood within the studio has been “soul-crushing” over the last month. And it doesn’t sound like management is making any significant efforts toward improving the atmosphere, either. According to those still with the company, employee frustration and sadness in the days and weeks following the layoffs was met with a surprising amount of indifference or even outright flippancy or hostility from management. Several people we spoke to told us that leaders had reiterated, across multiple meetings, that they couldn’t guarantee there wouldn’t be more layoffs, with two specifically recalling 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.”
Others said they were rebuffed repeatedly and discouraged from even discussing the layoffs whenever they tried to ask questions. Employees in one department recalled a post-layoffs Q&A session where a department head was asked if leadership taking salary cuts to prevent layoffs had been considered, only to respond that Bungie was “not that type of company.”
What’s more, sources we spoke to pointed out that many of the Bungie employees who were laid off were beloved community leaders within the studio, including many who had spearheaded employee inclusion and support efforts. Several people we spoke to expressed anger at the layoff of Bungie general counsel Don McGowan, who played a key role in Bungie winning an historic suit against a player who harassed a Bungie developer. Others laid off included a noticeable number of members of Bungie’s DE&I clubs, including co-heads of Pride@Bungie, Women@Bungie, and Accessibility@Bungie. When combined with other recent resource cuts, these dismissals have led to fears these clubs might be shut down. While researching this article, IGN noted that the public news articles announcing Women@Bungie and Accessibility@Bungie on its official blog were no longer accessible on the Bungie website, though it’s unclear exactly when or why this happened, or if it’s just an unintentional, recurring bug with the blog.
“I’m angry. I’m upset. This isn’t what I came here to do,” one person said. “It feels like many higher ups aren’t listening to the data and are like, ‘We just need to win our fans back, they still like us.’ No. They don’t…We got rid of some of our most knowledgeable beloved folks who have been here for 20+ years. Everyday I walk in afraid that I or my friends are next. No one is safe.”
Bungie, Eroding
Another anxiety sources discussed with us was that many of the reductions made at Bungie recently were part of a broader move toward outsourcing. Multiple individuals across various departments told us they’d heard discussions within their teams of plans to increase outsourcing both before and in the wake of the layoffs.
One team where those discussions have already become reality is in Quality Assurance [QA]. While outsourcing QA is extremely common practice industry-wide, Bungie historically has also enlisted an army of in-house, embedded QA testers working within individual teams. It’s a set-up the studio has prided itself on for years now, but QA sources within the studio are now afraid that strategy is on its way out. We previously reported that Bungie’s QA team saw a rash of mysterious departures in the months before the layoffs, and also noted a team-wide culture shift toward a general pool of testers consisting of both in-house and outsourced individuals. Former and current QA department members at Bungie tell us that in the last year, the team has seen increasing workloads and responsibilities, with more and more disciplinary actions taken for seemingly minor infractions. They also perceive growing hostility from team and company leadership, including a meeting in which QA was said to be referred to by leaders as “non-developers.” In total, sources tell us that over 10% of Bungie’s internal QA department was either fired or laid off between early October and early November, including both the reported layoffs and the departures leading up to them.
In a year that will go down in gaming history due to the sheer number of layoffs and studio closures, Bungie’s situation nonetheless stands out, and not for good reasons. It’s a well-known, long-standing studio that, despite historic culture problems, had managed to cultivate an increasingly positive community of fans around a beloved game while improving its own internal culture by gradual degrees. But in the wake of an acquisition that shocked many Bungie employees we’ve spoken to, and which seemed out of character with the studio’s independent streak, it feels to many like that’s all falling apart. Beloved colleagues have been laid off, benefits are vanishing, and many feel the “more people-oriented” (as one source put it) culture of recent years is being torn to pieces by the very Bungie leaders that touted it for so long. And seemingly all so those same leaders can retain a vestige of control over a company that’s already been sold away anyway.
“Folks still there are very much feeling ‘us vs them’ between leadership and workers,” one person said. “That trust has been eroded.”
Given their recent actions, the question of whether or not Sony will finally manage to swallow Bungie whole in a few months seems less and less important than the question of what Bungie’s current management will do to lead the company forward today.
Rebekah Valentine is a senior reporter for IGN. Got a story tip? Send it to rvalentine@ign.com.
This article was amended post-publication to clarify phrasing around financial targets.
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