Speaking with GameDaily, SCEE's director of corporate communications Nick Sharples said that "the management of the company has concluded that we need to change our structure, streamline and strengthen our business operations – and that our cost base needs to be significantly reduced."
Sony's vast European operation includes, as well as its publishing and PR teams in each country, four large development studios - three in the UK (London, Cambridge and Liverpool), plus one in the Netherlands (Guerilla Games in Amsterdam). Between them they have around 800 staff purely focused on games development - which makes them the UK's largest single employer for games development.
The confirmation comes following an internal briefing of SCEE staff outlining what may be on the cards - but the company is saying nothing else until a final decision is made. So whether any of the potential cuts will be felt amongst the development staff is still to be seen.
"We have informed our staff that we are considering proposals that may result in a number of redundancies across the SCEE Group in Europe. Until those consultations are complete we will not know how many redundancies may be needed. We will not be providing any additional information on this process or making further announcements at the conclusion of the process.
"The reason for the proposals is that, although SCEE has successfully faced a number of challenges throughout its history to become a leader of the videogame industry, our industry is in the middle of a period of transition where some of the fundamentals of our business are changing. Chief amongst these is that we are entering a future of increasingly networked and converged entertainment. In order to maintain our leading position in the market we sometimes have to make difficult business decisions."
In some respects the potential cut backs - rumoured to be up to 10 per cent of SCEE's operation - come as little surprise. The launch of the PS3 has infamously taken its financial toll on its Japanese parent, and while strong sales of the machine are expected to boost the company's profits for the year, staff cut backs would expedite further money-saving.