Square Enix Lays Off Over 180 Western Staff In “Overseas Structural Reform” After “Extraordinary Loss” — Western Chief Publishing Officer To Resign
Square Enix has announced that after an “extraordinary loss” over the last six months, they are laying off western staff as part of “overseas structural reform.” The western Chief Publishing Officer John Heinecke announced he would resign ahead of this news, and later claimed over one-hundred and eighty staff would be affected by the layoffs.
On October 31st, John Heinecke made a surprise announcement on LinkedIn, declaring, “Yesterday I announced to my team at Square Enix that I have decided to resign from my role as Chief Publishing Officer effective on November 21st.”
“This has been a difficult decision as it means that I must part with a very talented group of high-performing and passionate co-workers and friends across the US and Europe. It has been my distinct honor to lead, to work alongside, and to learn from such an amazing team,” Heinecke praised.
Turning to management, Heinecke added, “I want to thank the Square Enix leadership team for entrusting me in this role and giving me such a fantastic professional opportunity. And I want to thank my teammates and colleagues for their support throughout my seven years at the company.”
“Finally, I’d like to thank all of the Square Enix players and fans for your passion and enthusiasm- your energy keeps our teams fueled more than you know!” Heinecke closed.
The reason for Heinecke’s resignation may be due to what Square Enix announced on November 6th. Summarizing the Notice, Press Release, Financial Results, and Medium-Term Business Plan; Square Enix announced they had suffered “an extraordinary loss for the six-month period ended September 30, 2025.”
Mid-way through their fiscal year, the company has revised their forecast, expecting 41.1% less “profit attributable to owners of parent.”
Over the last six months, compared to the same period last year, Square Enix has saw 15% less net sales, and 14.5% less profit attributable to owners of parent. Though they had seen 28.8% more operating income, and 57.4% more ordinary income.
Net sales in gaming sub-segments (HD Games, MMOs, and Games for Smart Devices/PC Browser) had declined, but in the case of the former two, this was due to overshadowed by major releases happening in the same period last year; three Kingdom Hearts titles coming to Steam, and Final Fantasy XIV‘s Dawntrail expansion.
Nonetheless some sub-segments had seen increased profitability, and while Amusements and Publication both had declines in net sales, Merchandising was up in net sales and operating income.
As such, Square Enix reviewed their “development and marketing processes in response to significant changes in the operating environment, including the increasing importance of overseas markets, the advancement of transmedia development, the ongoing digital shift, and the rapid evolution of artificial intelligence (AI).”
This meant shifting “from a product-out approach to a market-in approach,” and more notably “a basic policy to reorganize its overseas organizations to enhance the efficiency and agility of its operations.” In layman’s terms, layoffs in Square Enix offices outside of Japan.
In their Business Plan, Square Enix discussed what the western layoffs would involve. This includes a “reorganization of the HD Games publishing organization from 11 divisions to 4 divisions,” and more in a “fundamental restructuring of the overseas publishing organization.”
Square Enix declared, “To strengthen development capabilities from a Group-wide perspective and to optimize resource allocation for maximizing the value generated by IPs, a further review of the development pipeline was conducted.”
“As a result, a decision was made to close overseas development studios and shift toward consolidating development functions in Japan.” VGC reports Square Enix President Takashi Kiryu stated in a video call to employees on the 6th that this would include “nearly all areas” of their western business.
“The management of IPs previously overseen by overseas development studios will be globally integrated. In addition, development support functions and personnel allocation, both in Japan and overseas, will be reviewed from the perspective of overall Group optimization.” Square Enix predicts this will save ¥3 billion JPY, or $19.55 million USD.
Square Enix also sought multi-platform releases for games, cross-media plans to create more “customer contact points”, and using AI to improve productivity (such as the goal of 70% of debugging to be done by AI by the end of 2027).
Exact figures of the layoffs were not given. Per VGC’s anonymous source, who was affected by the layoffs, 140 people were “at risk” in the London office, and that in a video call, Kiryu had stated the layoffs and restructuring in the US and Europe last year hadn’t worked.
On the same day the fiscal reports were announced, Heinecke shared a longer message on LinkedIn. Therein he revealed the layoffs “will add over 180 extremely talented professionals to the already long list of those impacted industry-wide by a changing and challenging gaming market landscape.”
He once again praised the former Square Enix employees for their passion, dedication, and being “a team of magicians that regularly pulls rabbits out of hats to get things done.”
Heinecke was also not afraid to speak his mind. After seeing another LinkedIn user (Jan Schnyder, co-founder of nunu.ai) praising Square Enix using AI for QA, Heinecke snapped back, “Meanwhile 180 passionate and hard-working people at Square Enix were told that their jobs were being eliminated today. Maybe wait to spike your AI football on another day.”
It appears Schnyder has deleted the post at this time of writing.
In fact, Heinecke speaking his mind has made him a controversial figure to some gamers.
On LinkedIn Heinecke waded into hot-button topics, such as showing dismay at Disney firing Jimmy Kimmel (as he and other assumed it was over criticism of US President Donald Trump), deemed the US Government’s investment into NVidia a “grift,” repulsed by the actions of the US Army and Department of Defense under President Trump, and agog at the notion of President Trump being the next Federal Reserve Chairman.
This arguably gives some credibility to an alleged message Heinecke gave on LinkedIn- if genuine, long since deleted. Screenshots show a user declaring gamers won’t buy AAA games that push an “agenda,” and that CEOs and staff that “embraced woke ideology” should be fired. “Oh p–s off,” Heinecke allegedly replied.
Even the mere allegation of making that comment has resulted in some considering Heinecke as the one “responsible” for any and all censorship and DEI initiatives at Square Enix regarding their western releases and marketing, and other western Square Enix employees who have allegedly made scandalous comments.
What pushed this theory more was Final Fantasy XIV‘s English Localization Lead Kate Cwynar seemingly being replaced by Paul Chandler. He had gone from one of the translation leads, to being introduced as “the lead of the localization team” — by Localization Supervisor Michael-Christopher ‘Koji Fox’ — in a video by Trash Taste on YouTube.
Koji later stated he had “passed the torch” to Chandler from his time as the Lead. Chandler also doesn’t suggest he is one of multiple leads.
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Cwynar had been accused of reposting a message on Bluesky supporting a “purge” after the assassination of Charlie Kirk in October of this year. While a screenshot of the alleged repost has circulated on social media, no such content is on her Bluesky profile at this time.
What we can see is Cwynar sharing the Trash Taste video, adding, “Link that starts from the localization section. (Paul! [hands raised emoji]).
This does not confirm, nor deny, Cwynar is no longer in the position, but has none the less sparked speculation that Square Enix has gone full scorched earth against western elements that harmed their reputation.
This is all despite censorship pre-dating Heinecke’s arrival at the company in 2018, such as Bravely Default in 2014, and historic censorship of cleavage and religious terms and iconography in classic Final Fantasy titles. Even so, the infamous “ethics department” became known in 2019.
Square Enix insisted it was to meet age ratings or to avoid offense in various regions; a practice that continued into this year.
Having joined Square Enix West in 2018 as a Chief Marketing Officer, Heinecke states on LinkedIn he was “led a 250 person marketing team across North America and Europe,” and was “Lead brand marketing, PR, influencer, community, business analytics, digital marketing, and creative functions.”
Joining Square Enix proper in 2022 as the Chief Publishing Officer, Heinecke’s team grew to 450 personnel working on “strategy, marketing, communications, creative, sales, insights, digital channels and customer support.” He would also “Work closely with Japan as senior leader of Western publishing business. Interact directly with CEO and leadership team in Japan to illustrate needs and challenges in Western markets and to propose solutions.”
No matter what happened under Heinecke’s tenure, or what decisions he or his superiors made; how will Square Enix calling the shots more directly from Japan affect the company’s future?
Square Enix had previously sold their western studios Crystal Dynamics and Square Enix Montréal in 2022, and have promised time and again to rebound from their losses.
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