Square Enix is planning substantial layoffs in Europe and the United States across marketing, sales, IT, and potentially QA roles as the company expands its use of generative AI in game development.

The move is framed as an Overseas Structural Reform aimed at centralizing development in Japan and leveraging automation to streamline operations.

The layoffs relate to a goal of automating 70% of QA and debugging tasks by the end of 2027, in partnership with the Matsuo-Iwasawa Laboratory at the University of Tokyo.

An earnings briefing slide highlights a push to strengthen global publishing and improve efficiency through the overseas reorganization, with projected annual cost savings of more than 3 billion yen (about $19.6 million).

President Takashi Kiryu described the move as an overseas structural reform intended to create a leaner, more agile international operation.

Internal slide decks outline a globally integrated marketing strategy and a strengthened development structure for North America and Europe as part of the overseas reorganization.

Public presentations describe the ongoing overseas reorganization and reiterate the goal of a globally integrated marketing approach for Western regions.

Square Enix says the layoff process followed careful leadership consideration and included support for departing employees.

Reporting outlets (Video Games Chronicle, IGN, Engadget) are seeking confirmation from Square Enix on restructuring details.

The company is shifting from timed exclusives to a broader multiplatform strategy, while continuing to expand the Final Fantasy VII Remake trilogy across platforms.

This restructuring follows prior Western studio divestitures and layoffs, with earlier sales of Crystal Dynamics, Eidos-Montreal, and Square Enix Montreal to Embracer Group as part of a broader strategy to reduce Western development involvement.

CEO Takashi Kiryu has signaled an aggressive stance on AI in game development, indicating automation will be a core driver of the company’s strategy.