Mass layoffs hit Square Enix hours after it shares plans to have AI handle "70%" of its quality assurance and debugging soon

Layoffs have hit Square Enix in the US and UK, with upwards of 100 employees reportedly impacted.

Several laid-off employees confirmed the news on social media. I reached out to Square Enix for comment and clarification, and received the following reply from a company spokesperson:

"We are reorganizing our operations in North America and Europe to strengthen our development structure and to drive a globally integrated marketing strategy.

"This was an extremely difficult decision, made following careful consideration and analysis by our leadership, in order to best position the Group’s long-term growth.

"We extend our heartfelt gratitude to the talented team members who will be departing the company for their significant contributions to Square Enix. During this period of transition, we remain committed to treating each individual with the utmost respect and providing extensive support throughout this process."

IGN reports that internal sources confirmed up to 137 jobs are at risk in the UK alongside an unknown number of US roles. Any would-be UK layoffs will be subject to local labor laws mandating a consultation period.

VGC, citing an internal video call, reports "nearly all areas" of the company's business will be impacted. I've seen several members of the Square Enix community management team, in particular, publicly confirm that they've been laid off.

This wave of layoffs seems to be part of Square Enix's push to consolidate development resources in its home country of Japan, which has been made public. In an investor presentation released today, November 6, the company outlines its "Overseas Structural Reform," which includes movements to "close overseas development studios and shift toward consolidating development functions in Japan."

"The management of IPs previously overseen by overseas development studios will be globally integrated," the company adds.

This presentation also shared the "goal" of having "70% of QA [quality assurance] and debugging tasks in game development" handled by AI by the end of 2027.

Square Enix has historically been vocal about investing in AI – CEO Takashi Kiryu said last year he wants the company to be "aggressive" with the technology – so this comes as no great surprise, but today's one-two punch of AI and layoffs has nevertheless stoked scrutiny at a time where the games industry is, by and large, grappling with exactly these two issues.

Studio Ghibli, Square Enix, Bandai Namco and more Japanese companies demand OpenAI avoid unauthorized use of their IP: "There is no system allowing one to avoid liability."