Square Enix Lays Off Developers in UK & US Amid Japan Refocus

Square Enix, the renowned Japanese gaming company behind Final Fantasy, Dragon Quest, and Kingdom Hearts, has announced another round of layoffs affecting developers in the UK and US. This decision aligns with the company’s strategy to prioritize operations in Japan, marking a major shift in its global approach.

Which Studios Are Affected by the Layoffs?

Sources confirm that Square Enix’s restructuring impacts employees across its European and American studios, including teams working on unannounced projects. While the exact number of layoffs is undisclosed, industry experts estimate hundreds of jobs could be cut.

This follows previous downsizing efforts, including the 2022 sale of Tomb Raider developer Crystal Dynamics to Embracer Group. Affected offices include Square Enix’s London and Los Angeles studios, which have contributed to mobile and mid-tier console games. Employees were reportedly notified internally and offered severance packages.

Why Is Square Enix Shifting Focus to Japan?

The move reflects CEO Takashi Kiryu’s vision to streamline Square Enix’s portfolio. Since taking over in 2023, Kiryu has emphasized a return to high-quality, Japan-developed titles while reducing reliance on underperforming Western projects.

This pivot comes after financial struggles with Western releases like Marvel’s Avengers and Forspoken, which failed to meet expectations. Meanwhile, franchises like Final Fantasy and Dragon Quest continue to thrive domestically and globally.

Analysts note this mirrors a broader trend—Japanese publishers are increasingly prioritizing homegrown talent and IPs to maintain profitability. Sony and other major players have made similar strategic adjustments.

Industry Backlash & Future Outlook

The layoffs have drawn criticism from labor advocates, including the Game Workers Union, who argue for better support for affected developers amid an unstable job market.

However, some analysts see this as a necessary realignment. “Square Enix’s strength lies in story-driven RPGs,” says industry expert Ravi Menon. “Focusing on Japan allows them to play to their core strengths.”

Looking ahead, Square Enix is expected to invest heavily in marquee titles like Final Fantasy VII Rebirth and Dragon Quest XII. The company has also signaled interest in blockchain and AI gaming, though these remain divisive among fans.

As the gaming industry evolves, Square Enix’s restructuring highlights the challenges of balancing global ambitions with regional strengths. Will this strategy pay off? Only time will tell.