Square Enix Confirms Layoffs as Company Shifts Focus Toward Japan and AI
- Sagar Mankar
- 6 hours ago
- 2 min read
Square Enix, the Japanese publisher behind Final Fantasy and Dragon Quest, has announced layoffs affecting staff in both the UK and the US. The move comes as part of a wider restructuring effort that has already reshaped the company’s Western operations over the past few years.
According to reports by IGN, employees in the UK and US were informed of the layoffs this week, with as many as 137 jobs potentially at risk in the UK alone. Under UK law, redundancy consultations are required, meaning the final number could be lower. In the US, the exact figure remains unclear, but dismissals are expected to continue through the end of the week.
Square Enix released a statement acknowledging the decision but stopped short of confirming how many individuals were impacted. “We are reorganizing our operations in North America and Europe to strengthen our development structure and to drive a globally integrated marketing strategy,” the company said.
The company’s strategy is clear: slim down its Western publishing operations and double down on Japanese development. In recent years, Square Enix sold studios like Crystal Dynamics, Eidos-Montreal, and Square Enix Montreal to Embracer Group, along with IPs such as Tomb Raider. It also allowed Hitman developer IO Interactive to go independent. What remains in its Western portfolio are franchises like Life Is Strange, Outriders, and Just Cause, plus publishing duties for PowerWash Simulator.
Even as it reduces staff, Square Enix is investing heavily in AI. In a presentation shared with investors, the company revealed plans to automate up to 70% of its quality assurance (QA) work using generative AI by 2027. This initiative includes a partnership with the Matsuo-Iwasawa Laboratory at the University of Tokyo, where a joint research team of more than ten members is exploring ways to integrate AI into development workflows.
Square Enix has already experimented with AI tools, including Azure OpenAI, and its CEO has previously stated the company intends to be “aggressive in applying AI” across development and publishing. In its latest financial report, Square Enix confirmed that "streamlining" operations could save over 3 billion Yen (nearly $20 million USD), reinforcing the idea that cost-cutting and AI adoption are central to its mid-term business plan.
