Summary
- Sega of America is laying off 61 staff, joining the tragic trend of layoffs in the gaming industry in 2024.
- Despite efforts to expand its industry presence and acquire popular IPs like Angry Birds, Sega is still cutting staff.
- There is concern that the layoffs will impact the quality of Sega's future games and negatively affect the working conditions of employees who remain.
Sega of America is laying off 61 of its staff, continuing a tragic trend within the gaming industry. Unfortunately, 2024 is already proving alarming for developers, particularly with tech giants like Microsoft cutting as many as 1,900 staff. Now it appears Sega might be preparing to announce its own layoffs in its American division.
Over the past year, Sega has been ramping up efforts to grow its industry presence through its many IPs such as Sonic the Hedgehog, Yakuza, Persona, and a host of others. Interestingly, Sega also gained the rights to Angry Birds in August 2023, thanks to its Rovio acquisition. By December, the company confirmed that it was working on multiple new Sonic mobile titles along with its Angry Birds for PC and console efforts, as part of Sega's global expansion ambitions. Despite this seemingly promising roadmap, Sega is also looking to trim its staff in the coming months.
On the heels of Like a Dragon: Infinite Wealth's release and rumors of an upcoming Sonic spin-off title, Sega of America will be laying off 61 of its staff on March 8, 2024, as per a GamesIndustry.biz report. The affected employees are said to be from two locations of its Irvine, California campus, with 49 from one office and 12 from another. While the company itself has yet to announce the layoffs, a January 8 WARN (Worker Adjustment and Retraining Notifications) notice filed in Orange County, California has confirmed the news. California's Worker Adjustment and Retraining Notifications Act requires companies with over 100 employees to provide a 60-day notice when it comes to planned redundancies and layoffs.
Sega of America lays off 61 of its staff
The layoffs come barely a year after Sega of America voted to unionize with the Communications Workers of America and formed AEGIS-CWA. In response to the news, AEGIS-CWA mentioned that a few months ago, the company announced plans to outsource QA and a part of localization. But despite its efforts, "the layoff that will result in the loss of 61 jobs across these two departments was made public," the union stated. AEGIS-CWA further pointed out that it has managed to "double the number of saved jobs" and to offer severance for the temp workers. However, it believes the decision to lay off staff "will have a negative impact on the working conditions of those who remain with the company" as well as the quality of Sega's future games.
It's worth noting this isn't the first time Sega laid off staff in recent years. Back in May 2023, Company of Heroes developer Relic Entertainment laid off 121 staff and by September, it canceled Creative Assembly's Hyenas owing to "structural reforms." Unfortunately, Sega is only among the latest to lay off developers in 2024. As of now, over 6,000 workers within the gaming sector have been laid off during the first month alone, with the likes of Microsoft, Unity, Embracer, and others reporting staff cuts.
Sonic the Hedgehog is a prolific game franchise that started life on the Sega Genesis/Mega Drive. Covering both 2D and 3D iterations through the generations, Sonic is known for speedy movements and interesting platforming mechanics.
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