While Bungie’s wide-reaching layoffs occurred on Monday, Tuesday was all about making sense of the mess, and uncovering new information about what happened, why and how it was linked into the performance of Destiny 2 specifically.
I spoke with sources, as did IGN and Bloomberg, and the picture painted through all of it is rough to see, especially if you’re an avid player of Bungie’s games, including Destiny. Here’s the information that was uncovered yesterday about how this went down, and what on earth is going on over there.
- While owned by Sony, Bungie continues to operate as an independent arm. A wider Sony ask for spending cuts resulted in Bungie deciding on a large number of layoffs (estimates say around 100 employees, 8% of the company), with them deciding who was laid off and how that process unfolded, going back on what was said a year and a half ago that the acquisition would not mean layoffs. Sony is not replacing anyone with internal employees, but some of the cut roles may now be outsourced entirely.
- Employees found themselves locked out of all their accounts, systems, email before many knew they had been laid off, and that was their first indicator. Others had short meetings in which they were told they were fired, but also not to tell anyone about it. Others found out the layoffs were happening on Twitter.
- Employees were often not allowed to say goodbye to other team members or exchange contact info, which had to be done after the fact. Many team/line managers had no idea who was being cut from their teams until it happened. Some teams only lost a few people, others were decimated.
- The company purposefully tried to internally hide just how many people had been fired, and only outside reporting after the fact came up with the ~100 number. It came to light Bungie had fired some incredibly storied veterans of the company like its composer Michael Salvatori, there since the pre-Halo days, and Lorraine McLees, who designed the original Halo logo.
- Some employee benefits expire at the end of the month, meaning being fired on the 30th means just a single day of additional coverage for those benefits. Healthcare will continue as COBRA coverage for three months, as long as severance.
- Many employees had unvested shares as a result of the Sony deal that mandated they stayed with the company a number of years afterward to collect. But that is null if you leave, and that includes being laid off. When that happens, shares revert back to Bungie, and as such, many employees just involuntarily lost those shares to the company that fired them.
While Bungie is far from the first company to execute cold, mass layoffs, this all sounds more like something out of an investment bank, rather than a company that was supposed to be the tight-knit family. Indeed many of the employees did feel like family to each other, which is why losing 1 out of 10 friends overnight is so hard on those who remain. But the way this was all done is a massive source of anger within the company, and the reason so many are willing to talk about what happened and exactly what’s going on over there.
That’s the layoffs, but further reporting from Bloomberg and IGN shed light on the problems that led to this mess. In a town hall, Pete Parsons offended many by saying the “right people” were left to work on Destiny, but Destiny is in rather bad shape at the moment, and in turn, Bungie is as well.
- Employees were told that Bungie was on track for a 45% revenue miss based on previous projections for the year. It’s unclear if the estimates were too high in the first place (I’m hearing they were unrealistic), but the miss also comes with base problems for the series.
- Lightfall was a big, negative turning point. While achieving a whole lot of players at launch (it was Steam’s highest concurrent count since D2 launch on the platform) extremely poor reception to the expansion reverberated through the rest of the year and player engagement fell off hard.
- Employees were told player sentiment was at an all-time low, something the employees themselves had been saying for a long while, and they had begged their bosses to make changes that players would come back for, many of which were rejected.
- Now, the previously reported delay of The Final Shape for four months is indeed confirmed from both IGN and Bloomberg, though not Bungie. Expansion pre-sales are low, and the expansion is looking “good not great” according to insiders, hence the extra time to work on it.
- Marathon too is delayed to 2025, and there are reports it may be looking at little rough at present. Marathon needs to be a smash hit in order for Bungie to have a significant revenue source they can rely on that isn’t Destiny 2.
- Additionally, speaking of revenue, many employees have been upset about Bungie’s investment in a sprawling, expensive new 200,000 square foot HQ in Bellevue that has cost tens of millions to build, despite Bungie relentlessly plugging themselves as a leader in remote work.
- There’s also just bad luck. While this may have been a down year for Destiny 2 no matter what, this is also a wild year for game releases, with dozens of top-rated, extremely good, often very long games being released almost endlessly. It’s a year that offers an enormous amount of alternatives to an aging, seven year-old live game like Destiny 2, no matter what content it’s producing. So that’s at least a factor.
But now it’s hard to see how the situation does not get worse. I have seen low community sentiment before, but this is “core of the earth” low now after how this went down. Anger at Bungie management has many players walking away from the game or cancelling Final Shape pre-orders. A 6-7 month extended season 23 will mean even more attrition from players. And given all this, there’s a general sense that Destiny essentially ends for many after The Final Shape, no matter what else is planned. A common industry thought is that Bungie needs to pivot to Destiny 3 instead of letting Destiny 2 shamble on endlessly, but Bungie has given absolutely no indication that’s the plan.
It’s a terrible situation from every angle. We’ve seen a lot of horrible industry layoffs this year, but for those in the Destiny community and for Bungie employees specifically, this feels like an active betrayal, and no one really knows how to be motivated to keep playing, to keep working, after all this.