Square Enix has announced a sweeping round of layoffs affecting its U.S., European, and U.K. teams, as part of a major global reorganization aimed at consolidating development in Japan and integrating artificial intelligence into its production pipeline.
The news follows a company-wide briefing where employees were informed of significant staff reductions across publishing, marketing, and quality assurance departments. Reports indicate that over 100 U.K. employees are at risk, with similar cuts expected in North America as the publisher scales back its overseas operations.
In a statement shared internally and later confirmed to multiple outlets, Square Enix said the restructuring is designed to “strengthen the company’s global development strategy” and ensure more unified operations between its Japanese headquarters and international teams. The publisher, best known for franchises such as Final Fantasy and Kingdom Hearts, plans to centralize most development oversight in Tokyo moving forward.
The layoffs come just days after Square Enix revealed its plan to use artificial intelligence for up to 70 percent of its QA and debugging work by 2027. The timing has drawn criticism from industry observers who see a clear link between the company’s automation ambitions and the human job losses now unfolding.
Sources at the company told Video Games Chronicle and IGN that affected staff were given notice this week, with transition support and severance packages being arranged. While Square Enix has not disclosed exact numbers, employees in both the London and Los Angeles offices confirmed that multiple departments were affected.
The restructuring is part of a broader cost-saving initiative under Square Enix’s new medium-term business plan, which aims to streamline development pipelines and reduce operational expenses. The company has also been struggling with inconsistent performance across its Western releases in recent years, leading to a stronger focus on its Japanese core studios.
For many employees, the layoffs mark the latest in a string of industry cutbacks as publishers adapt to rising development costs and emerging automation technologies. While Square Enix’s AI-driven approach could reshape how its games are built and tested, the shift raises serious questions about the future role of human developers in one of gaming’s oldest and most storied companies.