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 thresholds 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 confirming previous reports that 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.”