Sega lays off 10% of US, EU staff

Sonic publisher cuts more than 70 workers from London and San Francisco offices, creates new digital-focused division in latter location.

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It's only been a matter of weeks since Sega shuttered the San Francisco studio formerly known as Secret Level, but the publisher is cutting payroll again.

Sega's dedicated digital division in San Francisco will oversee titles like Sonic the Hedgehog 4: Episode 1.
Sega's dedicated digital division in San Francisco will oversee titles like Sonic the Hedgehog 4: Episode 1.

Sega today confirmed for GameSpot that it has laid off 73 employees from its London and San Francisco offices as part of restructuring effort for its Western operations. The cuts represent about 10 percent of Sega West, the company's non-Japanese business. A spokesman for Sega said the reorganization "reflects both the changing face of the global video games market and a need to improve efficiencies within the operation."

The cuts were made primarily from marketing and internal development divisions and were split about evenly between the publisher's London and San Francisco offices. As part of the restructuring, Sega is also setting up a new digital-focused division that will be based out of San Francisco, while the London location "will now act as a hub for the traditional console and PC side of the business." In addition to console downloadable titles, the digital division will be responsible for development on systems like the iPhone and iPad, as well as potentially social media networks.

Sega has undergone a series of institutional changes since the global economy hit the skids in late 2008. In January of 2009, Sega of America confirmed a series of layoffs due to the recession. In the months that followed, parent company Sega Sammy cut 560 jobs, or 18 percent of its global workforce. There was also an overhaul at the highest ranks of the company, as June saw the departure of Sega of America president Simon Jeffrey, with his duties being added to those of Sega of Europe head Mike Hayes.

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