Sega, part of Sega Sammy, has joined a list of video gaming companies recently declaring layoffs. Sega announced the layoffs after selling one of its development facilities.
Sega’s newest wave of layoffs will affect 240 employees. According to the firm, this will involve Sega Europe, Creative Assembly, and Sega Hardlight employees.
According to recent news, Sega Hardlight will be the least affected by the layoffs. Instead, Sega Europe and Creative Assembly will take on most of the layoffs. In this article, we learn about the layoffs at Sega.
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Sega plans to sell Relic Entertainment
Sega is selling “Company of Heroes” developer Relic Entertainment and laying off 240 workers from its European and U.K. teams. Thus, Sega became the latest video game firm to cut its workforce in 2024.
Sega stated the following in a document filed with the Tokyo Stock Exchange on March 28, 2024:
“The business environment related to the customer area, particularly in the European region, has been changing rapidly. This includes an impulsive decline in COVID-19 stay-at-home demand. Also, an economic slump happened due to inflation and lower profitability.”
“We have decided to implement structural reform at our European bases. This is to adapt to these changes in the environment quickly. Also, it will improve profitability.”
Sega has also been taking into account the following:
- a review of the medium-term lineup,
- optimization of fixed expenses,
- improvement of investment efficiency, and
- review of the development/sales structure and management system.
As a result of the transaction, Relic, based in Vancouver, will become an independent studio funded by an outside investor. It will also continue to work on its current products, including “Company of Heroes 3.”
Relic issued a statement on X that read
“To our fans, we want to reassure you that we will continue to support our games, including ‘Company of Heroes 3’. We are looking forward to the 1.6 release in April. It will include fresh content and upgrades requested by our community.”
The Sega layoffs and Relic sale were announced on the same day. It was reported that more than 100 employees at Sega America accepted the first union contract at a major game company. It includes the conditions for annual wage hikes and layoff warnings.
Sega employees secured a union contract
Employees at Sega of America have secured a union contract. A few months after several video game company employees were affected by a wave of layoffs, the contract granted wage rises. This makes them the first significant U.S. video game company employees to approve a union contract.
The deal covers around 150 Sega America employees who are members of the Communications Workers of America. It includes yearly raises based on a labor union statement.
The minimum annual salary increases will be 4% in 2024, 3% in 2025, and 2.5% in 2026. The contract also includes layoff protections, including advance notice of job losses and severance pay for permanent layoffs, which have rocked the gaming industry in recent months.
Workers will also be given advance notice of any intended use of A.I. in the workplace. The company promises to continue hybrid work for at least six months and codify perks. These include an annual bonus scheme, retirement benefits, health insurance, and more.
Last year, Sega America workers opted to create a union, the fifth video game union in the United States.
Sega employees were also let off this year, slashing 61 staff in early March. After talks with the company, the Sega union tweeted that it could double the number of saved positions and pay severance to its temporary workers.
Sega Layoffs
Sega will cut 240 jobs across its European operations and sell off Company of Heroes developer Relic Entertainment as part of a cost-cutting plan.
Most job reductions will occur at Total War’s developer, Creative Assembly, and the publisher’s Sega Europe office. These changes follow previous cuts at the UK-based Creative Assembly in 2023 following the cancellation of live-service shooter Hyenas.
As mentioned, Relic will become an independent studio with the support of an unknown “external investor.” The developer has also experienced layoffs, with 121 employees being laid off in May 2023.
In an email to Sega employees, the company’s European head, Jurgen Post, apologized. It’s because they made this news public before some employees personally heard about the job losses.
“Due to the nature of this news and our legal obligations in Japan, we have been unable to provide any details to you until now,” Post stated. “That is not good news, as it implies that some of you may have already read about this on social media or in the media before receiving this email. If this is the case, I apologize.”
“Change must be made to safeguard the future of our games business. Also, this is to ensure that we are well placed to offer the best possible experiences to our users in the future,” he added.
Conclusion
Relic Entertainment has made a redundancy following its sale to Sega. The total number of employees who were let go was not specified in the studio’s LinkedIn announcement. However, Robyn Smale, an external development producer, stated that the decision affected 41 people.
“Letting employees go was not a simple choice. It was made purely to offer Relic the best possible chance to survive in an ever-changing industry,” according to the company.
“We are working closely with people affected, offering severance payments, extra benefits, and outplacement help. We sincerely apologize to those we are saying farewell to. We thank you for everything you’ve done for our studio and projects, and we wish you all the best,” the company said.
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