I just remembered they talked about this issue, if the statement was made by other company then I would be talking about it instead of Nintendo but is not the case. I'm not really judging Sony here, they do have the rights to fire them and what they have done is far from the worst business practices in the industry like EA, but it is an issue worth talking about I believe.

Well, it is not like Sony is actually taking talented parts of their first party stripping them of everything that makes them strong, getting the game out, than releasing them. These studios so far, have not been producing calibur of content and sales that you would not get from better third party publisher. 

Actually it could be argued having high turnover is bad, because the process involved in creating or buying something than to disolve it might seem as a wasted resources. (This is not related to sony, but more that statement you made). 

Employment protection is quite low in the UK and practically non-existent in California, so from a legal point of view, Sony can do whatever the fuck they want. If we look at the moral aspects, though... Personally, I think this hire and fire mentality is pretty bad and hurts companies moreoften than it benefits them. It must be somehow strange as an employee to never know when your time has expired. I would feel very uncomfortable if I had no employment protection.

It is very common practice to lay people off in the games industry after a game has shipped or a game has been cancelled. Pretty much every industry veteran has likely been laid off multiple times.

All studios do this. It sucks but it's a fact of working in the industry. I myself have been laid off twice. It's actually one of the bigger factors that has me strongly considering switching careers.

This isn't about Sony or MS, or Nintendo, or any other major publisher. They all do it, contrary to what others might say:

http://kotaku.com/nintendo-of-europe-will-lay-off-320-people-this-month-1627924242
http://kotaku.com/report-nintendo-of-korea-is-laying-off-most-of-its-sta-1767681089
http://arcadesushi.com/microsoft-closing-xbox-entertainment-studios-cuts-18000-employees/

I agree.  At least this way those that were laid off will have something to put on their resume towards future jobs.  Better to gain some experience than none at all.

This article is about people fired before the game is even released. 

I was just about to mention that Nintendo layed off hundreds of people in different parts of the world not that long ago.  All businesses have to make hard decisions sometimes.  

If people are qualified enough to get a high profile job they will find a new one in no time. I really don't understand people worrying about fired employees.

/facepalm.. it's called capitalism.

Secondly, every industry is unique. People in the industry knows what's up. Im sure game devs understand that they could be fired any time once a game is completed. It is just irrational to expect the publisher to keep 200+ game devs on the payroll after a game if they dont have any substantial project to work on afterwards.

I guess my response was more to the evolution part. I actually do not know Sony London well enough on their track record. However it does seem like their sole purpose was showing how VR works. 

As for the other developer, weren't they behind the horribly reviewed and rushed game Killstrain?