According to Wccftech, Square Enix is reportedly laying off staff in “nearly all areas” of its Western offices, affecting both European and US operations. The company’s London office alone has approximately 140 employees at risk of redundancy, though exact numbers across all locations remain unconfirmed. These cuts were announced during an internal video call and are part of a broader restructuring that Square Enix president Takashi Kiryu says will make the company more “lean” and “agile.” The move is projected to save the company 3 billion yen annually while shifting development work closer to its Japanese headquarters. This restructuring coincides with Square Enix’s bold announcement that it wants AI to handle 70% of its QA testing by 2027.
The real story behind the restructuring
Here’s the thing – when companies talk about becoming “lean” and “agile,” it usually means one thing: cutting people. Square Enix isn’t just trimming fat here – they’re fundamentally changing how they operate in Western markets. The language in their progress report about “consolidating development functions in Japan” basically means they’re pulling back from international expansion and doubling down on home turf.
And that AI target? 70% of QA work by 2027? That’s not just ambitious – it’s telling. They’re openly signaling that entire job categories are on the chopping block long-term. When you combine that with these layoffs, you get a pretty clear picture of where Square Enix sees its future workforce: smaller, more centralized, and heavily reliant on automation.
This isn’t just a Square Enix problem
Look at what’s happening across the industry. NetEase just cut its California-based team after Marvel Rivals’ successful launch. They’ve been shutting down subsidiaries left and right – Fantastic Pixel Castle yesterday, Bad Brain Game Studios today. There’s a clear pattern emerging where Asian gaming giants are pulling back from Western studio operations.
So what’s driving this? Basically, it’s about control and efficiency. These companies are realizing that managing distributed teams across different time zones and cultures creates more headaches than it’s worth. When you can save 3 billion yen annually by consolidating, that math becomes pretty compelling. But at what cost to creativity and local market understanding?
The human impact they’re not talking about
While Square Enix focuses on the financial savings and operational efficiency, there’s a human story here that’s getting buried. 140 people in London alone facing redundancy – that’s not just a number. These are developers, artists, marketers, and support staff who’ve built careers around bringing Square Enix games to Western audiences.
And here’s the uncomfortable question: when you centralize everything in Japan, do you lose the cultural nuance that makes games resonate with international players? Square Enix has some of the most beloved franchises in gaming – Final Fantasy, Dragon Quest, Kingdom Hearts. Will those games maintain their global appeal if they’re developed entirely through a Japanese lens?
The gaming industry is going through some brutal transformations right now. Between AI ambitions and corporate restructuring, it feels like we’re watching the end of an era for how big games get made and who gets to make them.
