Square Enix Layoffs And Restructuring - 2025 Edition

Yesterday IGN broke the news of layoffs occurring at Square Enix' overseas offices and studios, primarily in the United States and United Kingdom.

Square Enix is undergoing mass layoffs today, potentially impacting over 100 individuals, alongside a broader effort to consolidate its publishing organization and focus its development work in Japan.

Via public posts from former employees as well as confirmation from internal sources, IGN has learned that employees in the UK and US are being informed of the layoffs today, with an unknown number of US employees being dismissed by the end of the week, and a possible 137 jobs at risk in the UK. Under UK law, Square Enix must undergo redundancy consultations to see if any jobs can potentially be saved, so the final number in the UK could be smaller. It is not yet clear which teams were impacted by this, or to what extent.

Internally, a slide presentation now publicly available was also shared with employees earlier today, offered a progress report on Square Enix's ongoing "reorganization of overseas organizations", of which this restructuring seems to be a part. Per Square Enix, the strategy has already involved "clos[ing] overseas development studios and shift[ing] toward consolidating development functions in Japan."

I downloaded the document and, since the leadership over at Square Enix loves AI so much, I let Copilot provide a TL,DR of the presentation.

## 🎮 Strategic Vision: “Square Enix Reboots and Awakens”

A 3-year transformation plan focused on long-term growth through four core strategies:

• 1. 🏗️ Enhance Productivity in Digital Entertainment (DE)
  
  
• - Shift from quantity to quality in game development.
• - Consolidation of overseas studios; focus development in Japan.
• - Launch of major titles like *Octopath Traveler 0*, *Dragon Quest VII Reimagined*, and *Killer Inn*.
• - Introduction of off-app payment methods to improve profitability.
• - QA automation via generative AI (joint research with University of Tokyo).
  
  
• 2. 💰 Diversify Earnings by Strengthening Customer Contact
  
  
• - Multi-platform strategy for key IPs (e.g., Final Fantasy, Dragon Quest).
• - Expansion of catalog title sales and merchandising.
• - Cross-media initiatives: anime, live-action, stage adaptations.
• - Global growth of publishing IPs and overseas franchise stores.
• - Group collaboration with TAITO for IP exposure in amusement facilities.
  
  
• 3. 🧱 Build Foundational Stability
  
  
• - Structural reforms in overseas publishing: reduced divisions, leaner teams.
• - Integration of global marketing and data functions under CMO.
• - Annual cost savings of over ¥3 billion expected from reorganization.
  
  
• 4. 📊 Capital Allocation: Growth vs. Shareholder Returns
  
  
• - Strategic investments in AI, data marketing, and M&A.
• - Planned dividend payout of ¥15.5 billion in FY2026/3.
• - Stock split (3-for-1) implemented in October 2025.
• - Shareholder return ratio projected at 91.7%.

One big issue brought up in the various reactions was the plan to move up to 70% of quality assurance work from humans to artificial intelligence. But that was only a small part of the presentation, although worthy of its own slide.

From the presentation

We heard of a reorganization in Japan in which SE moved from Created Business Units to Creative Studios. The below slide fleshes out the progress on the effort.

An organizational chart

The price savings of consolidating 11 divisions down to 4 is expected to be ¥3 billion in the next year, which comes out to be $US19.6 million at today's exchange rate.

Another organizational chart

At the risk of offending some folks in the gaming press, stories about layoffs, especially if AI is involved, are sexy. But the other side of cutting costs is bringing in more revenue. After all, if a good game comes along gamers will concentrate on the next interesting trailer.

The Square Enix game pipeline

I'm not going to lie. I'm used to covering game companies like Pearl Abyss and Cloud Imperium. Those companies are not famous for their ability to release finished games. The graphic above points to 5 new games. That's more than I'm used to seeing in the roadmaps of the games I play.

Square Enix games - 2026

I'm also glad to see that the Japanese game maker realizes it needs to focus on quality games. And yes, I'm aware that for some, the road to quality is to make sequels. The urge for security and financial success is often the path most trodden. That thinking is as true in the video game industry as it is in Hollywood.

Dividend history

But in the end, entertainment is still a business. Unlike the game companies I usually cover, Square Enix actually issues dividend payments. While the latest story is about more layoffs, the entire story is about Square Enix trying to turn its finances around after a few not-so-good bordering on terrible years.