Sega cuts UK and US jobs

73 positions go as company reorganises to take advantage of new digital markets

Sonic publisher Sega is to axe 73 jobs in the west, as it looks to shift the business into a position to take advantage of more digital business opportunities.

In London, 37 staff will lose their jobs, with the division continuing to focus on more traditional games publishing. The San Francisco department will refocus on digital markets, at the cost of 36 employees.

"We've been going through the planning process the past six months, taking a look at the future of the market and where we think our investments need to be," Mike Hayes, president of Sega West, told Industrygamers. "It's no surprise that the share of digital is growing as an overall part of the videogame business, so we decided we have to invest more in that specific area. And notably, we had to get our business groups appropriately sorted to provide the right focus."

"Traditionally, Sega of America and Sega Europe had been running a dual company where both would look at traditional goods and both would look at the digital side. What we decided to do is to make San Francisco the kind of hub for our digital efforts, and therefore make London the hub for the traditional packaged goods part."

He added: "I would stress, however, that this is very much administrative reorganisation, because clearly we want to be very successful with digital globally. Likewise, we want to continue to be successful with traditional goods. So the reorganisation allows us to be much more efficient in terms of our costs, but probably more importantly in the way that we can look at the future business."

Parent company Sega Sammy said this month that it expected higher profits for the full year ended March 31, 2010, but also pointed to weak software sales outside of Japan. However, Hayes claimed the cut in headcount was not a decision made in Japan.

"This was an initiative taken by the West," he said. "Of course, we're always under pressure from our head office who isn't? But this is definitely something we looked at as a business as the Western business managers.

"We wanted to figure out how to be more effective in this incredibly growing marketplace and how to be more cost effective. It's something that the management teams in San Francisco and London have embarked upon."

Hayes indicated that the digital division will continue efforts on XBLA, PSN, iPhone and iPad, and also noted the success of downloads of PC games such as Football Manager. The company is also looking at gaining expertise in the social gaming category, but could not say how significant digital would be to the overall business.

"All we know is it will be a bigger part of the business as we move forward, but in terms of the goals and how much digital is going to be, that's something we're going to have to work on with this new group and figure out over the next few months. Do we want to move everything from traditional into digital? Absolutely not. We're taking what we feel is a very balanced approach; it'll be an evolution, not a revolution."

Latest comments (8)

Fran Mulhern , Recruit3D7 years ago
Best wishes to all those affected.
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Daniel Garraway Functionality Tester, SEGA Europe7 years ago
I'm starting to wonder how many people are left O.o
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Terence Gage Freelance writer 7 years ago
Good luck to everyone involved in finding new jobs.
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Show all comments (8)
Dwayne Cort Associate Producer, OGPlanet7 years ago
Sorry to hear about the Cuts guys, i know all of you have bright futures and you will land on your feet. Best wishes.
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Tulay Tetiker Head of QA - BioWare Edmonton & Montreal, EA BioWare7 years ago
I concur with the statement above
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Chris Nash QA Engineer 7 years ago
Yet more cuts? I hope Development Services hasn't been too badly affected, but if it has been, then best wishes to everyone...
(is/was also a SEGA employee)
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Bruce Everiss Marketing Consultant 7 years ago
Is the boxed retail game on its deathbed, except for a handful of mega hits?
Certainly the business model has become very unattractive.

Meanwhile online delivery, cloud games, mobile gaming and social gaming go from strength to strength.
It is pretty obvious where most gaming businesses should be putting their resources.

However 73 jobs from a mid sized publisher looks like more than resource re-allocation. It seems to be more a case of cutting the cloth to suit financial reality.

Good luck to everyone involved, there is still a lot of industry out there, it is just in different places.
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Solomon Lee Web-Based Games Reviewer 7 years ago
All the best to those who lost their jobs.
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