Naughty Dog, Creator of The Last Of Us, Trims Development Team

The video game industry is currently grappling with a wave of layoffs, and even contract developers at PlayStation first-party studio Naughty Dog are not exempt. According to sources, Naughty Dog, known for hits like Uncharted 4: A Thief’s End and The Last of Us Part II, has initiated contract terminations for numerous employees.

Internal communications regarding these layoffs were made within the Santa Monica, California-based studio last week, as disclosed by two insiders familiar with the situation. Multiple departments, from art to production, have been affected, with quality assurance testing bearing the brunt of the cuts. Reports indicate that at least 25 developers are part of this downsizing. It appears that full-time staff members have been spared; Naughty Dog’s headcount stood at over 400 as of July.

Sources have informed Kotaku that no severance packages are being offered to those affected by the layoffs. Both affected developers and the remaining staff have reportedly been encouraged to keep this news confidential. The contracts of the affected employees are not set to be officially terminated until the end of October, and they are expected to continue working throughout the remainder of the month. As of the time of this report, Sony has not responded to requests for comment.

Despite the HBO adaptation of The Last Of Us receiving favorable reviews, a multiplayer spin-off based on the game’s Factions mode has faced developmental challenges. In June, Bloomberg reported that Sony redirected resources away from the project following a negative internal assessment by Bungie, the live-service specialist behind Destiny 2, which Sony recently acquired. One source now reveals that while the multiplayer game is not completely canceled, it is effectively on hold at this point.

These layoffs also come a few months after studio co-president Evan Wells announced his retirement at the end of 2023, having spent 19 years at Naughty Dog. Neil Druckmann, the creative director, lead co-writer for the latest Uncharted and The Last of Us games, and contributor to the HBO series, announced a restructuring of the studio’s leadership around the same time.

Naughty Dog is not the only major first-party studio to experience layoffs this year. In January, the Xbox studio responsible for Halo, 343 Industries, was significantly affected by mass layoffs at Microsoft. Major gaming companies like Electronic Arts, Ubisoft, Epic Games, and Embracer have also contributed to the growing number of layoffs in recent weeks and months, causing increasing unease among developers as they witness a continuous stream of negative news from colleagues and peers.

Back in April, Sony announced its ambitious plan to sell a record-breaking 25 million PS5 units in the current fiscal year.