Sony Corp.-owned video game company Bungie said Wednesday it would lay off 17% of its workforce — or 220 people — amid economic difficulties in the gaming industry.

The Bellevue, Wash., firm said the layoffs will affect every level of the company, including executives and senior leadership. The company said it will offer severance, bonus and healthcare coverage to affected employees.

“As we’ve navigated the broader economic realities over the last year, and after exhausting all other mitigation options, this has become a necessary decision to refocus our studio and our business with more realistic goals and viable financials,” Bungie Chief Executive Pete Parsons said in a post on the company website.

The “Destiny 2” and “Halo” creator had rapidly expanded while trying to work on games from three separate video game franchises. Sony, the PlayStation maker, acquired the company in 2022. Bungie was founded in 1991.

But by 2023, as the economy cooled, the video game industry started to course correct after its massive expansion during the pandemic. Bungie, in particular, also faced a “quality miss” with its “Destiny 2: Lightfall” game, Parsons said.

“We were overly ambitious, our financial safety margins were subsequently exceeded, and we began running in the red,” he said in the post.

The company plans to rely more heavily on its parent company going forward. Parsons said about 12% of its jobs, or 155 roles, will be integrated into Sony Interactive Entertainment over the next few quarters, a move that reduced the number of layoffs. The company will also spin off a new “science-fantasy” action game into its own studio under PlayStation Studios to allow further development, Parsons said.

Bungie isn’t the only video game company that’s faced layoffs in the last two years. Last year, at least 6,500 workers worldwide were laid off, according to a Times analysis, including hundreds at California-based companies like Unity and Riot Games.