UPDATE 4.30pm UK: Dreams developer Media Molecule has now confirmed the layoffs at the studio reported earlier today.

"Media Molecule has made significant strategic changes during the past year, including shifting our focus from Dreams to our new project," reads a statement posted to X, formerly Twitter.

"We have had to make the difficult decision to begin the consultation process for team members within certain departments of the studio. This is a tough moment for the individuals impacted and the studio overall.

"Every single role that has been put at risk is delivered by someone who has contributed something special to Media Molecule. We will make sure those impacted receive the best support we can provide during this process.

"We will continue to support the Dreams Community for the forseeable future and will update on future plans at a later date."

ORIGINAL STORY 1.30pm UK:Staff at UK developer Media Molecule have today been told to expect job losses, with around 20 staff expected to be laid off.

That's around 15-20 percent of the overall studio, GLHF reported, adding that staff were told the news at an internal meeting held this morning.

Eurogamer has contacted PlayStation for comment.

Media Molecule was founded in 2006 and acquired by Sony in 2010. The studio made its name developing the LittleBigPlanet series of games and 2013's Tearaway, before pouring years into game creation platform Dreams.

Sony shut down live support for Dreams last month, something Media Molecule described as a "difficult decision" as it moved to focus on "an exciting new project" unrelated to Dreams.

Dreams remains available to buy and play, though no new updates or events will take place.

"Media Molecule is working on a new project," Media Molecule stated back in April this year. "We are not ready to talk about this yet, we can confirm that it is not Dreams 2, or the Dreams IP."

The news follows job losses at PlayStation's Visual Arts group, an internal production company which aids with various first-party projects, which were confirmed by staff on social media last week.

2023 has seen a spate of layoffs across in the video games industry, and feels one of the worst years for job losses in recent memory. UK studios have repeatedly been hit, with around a third of Worms publisher Team17 currently on the chopping block, an unknown number of jobs going at F1 Manager maker Frontier, and Fall Guys studio Mediatonic hit badly by Epic Games' wider layoffs.

CD Projekt Red confirmed its third round of layoffs in three months over the summer, with 100 staff affected. Meanwhile, enormous umbrella organisation Embracer has been cutting jobs across its empire, with Saints Row studio Volition shuttered completely.

Earlier this month, it was claimed that "most of" The Wolf Among Us 2 studio Telltale Games had been affected by layoffs, with the exact picture there still unclear.