Sources at Sony's Liverpool, UK studio say that its head-count will ultimately be reduced by about half.
The news comes after the format-holder confirmed last week that the development team was to be 'restructured' following project cancellations.
At the weekend sources told Develop that as much as 50 per cent of the workforce could be cut loose as part of the reshuffle.
One affected staff member – speaking on the condition of anonymity – told Develop that Sony’s layoff operation was “looking heavy”, estimating that “around half us may be gone”.
That estimate remains unconfirmed. Sony has declined to comment.
On Friday the company said that a number of projects at Liverpool – the firm’s second biggest development studio in Europe – will “cease immediately” as part of a comprehensive restructuring operation. Develop believes Sony is likely looking to reallocate affected staff to other teams, but involuntary redundancy measures appear likely.
“Our North West Studio Group has been, and will continue to be, a vital cog in the WWS family, with a history of producing genre defining games such as MotorStorm, WipEout, Formula 1 and WRC,” read a Sony statement released on Friday.
The Liverpool office – founded in 1984 as publisher Psygnosis – has brought to market over 100 development projects, including ground-breaking racing titles such as WipEout and Destruction Derby.
Iconic games have hailed from the North West-based studio in its 25 years, and many of its alumni have gone on to found other key UK games studios. Psygnosis was known for the likes of Shadow of the Beast, Lemmings and many more.
Along with WipEout and Destruction Derby, SCE Liverpool handled the likes of Colony Wars, and Formula One at a building it shares with a QA team and the SCEE External Development team.
Word of the restructuring came following recent media reports that claimed Sony's total profit could hit $1 billion for its third fiscal quarter (October-December) – a prediction which, if true, would mark a huge rise above analyst expectations. The results will be reported on February 4.
Japanese news group Nikkei claimed that the alleged profit jump would be partly due to “strong sales of LCD TVs and payroll cuts and consolidation of facilities”.
NYSE shares in Sony Corp peaked last week at $34.89 – making it the company’s highest price since September 2008 when the global financial markets plummeted in the wake of the sub-prime mortgage crisis.