Sega hit with layoffs, future games in jeopardy

Many Sega of America employees lost their jobs yesterday as lower than expected revenue lead to a restructuring of the company. 

Former employees have been tweeting of their departure. One employee took to Reddit, misinterpeting the mass layoffs for a shutdown of Sega’s American division. Sega has confirmed, however, that it has not closed its doors. Sega of America’s entire QA department has been shut down. QA for the company’s remaining titles will be handled by Sega of Europe. Other layoffs include positions in marketing, design, social, and development.

Yesterday’s restructure of the firm mentioned the formation of “a smaller company positioned for sustained profitability” in the U.S. and Europe. It is focused on four specific IPs: Sonic the Hedgehog, Football Manager, Total War, and Aliens. All other titles are said to be canceled. An IGN source agreed, stating: “any currently announced game that isn’t included on that list will not be published by Sega, leaving a decent amount of the publisher’s upcoming publishing roster in jeopardy.”

Downloadable releases, such as Jet Set Radio and Hell Yeah, seem to be in the clear, however, if Arekdo Studios’ latest tweet is anything to go by. What this means for the fate of titles such as Anarchy Reigns, Phantasy Star Online 2, Super Monkey Ball: Banana Splitz, and future Yakuza titles outside of Japan remains to be seen.

See Sega’s full statement below, courtesy of Joystiq:

Due to the challenging economic climate and significant changes within the interactive gaming industry, SEGA has made the decision to consolidate its publishing business in order to focus on developing digital content and driving its existing IP such as Sonic the Hedgehog, Total War, Football Manager and the Aliens franchise. This realignment of the business around existing and digital IP is a necessity to ensure that SEGA continues to invest and enhance its digital business offering, whilst reducing its reliance on traditional packaged goods.

As a result of the SEGA Sammy Board decision to consolidate the business, many of our internal functions will be re-structured and this could result in a number of redundancies within the publishing business across the Western organisation. The company will be entering into a re-structure phase to reflect the unprecedented change in our industry and to move the company forward appropriately.

The changes will position SEGA as a content led organisation, maximising sales with a strong and balanced IP portfolio across both packaged and digital distribution. The management team are confident that the proposed restructure will benefit the company and make it fit for purpose within the changing nature of the industry over the coming years.

Additionally, view the PDF press releases of the company’s restructure announcement from yesterday here and here.