Sega has announced sweeping layoffs that affect Sega Europe, Total War maker Creative Assembly, and Sonic Dream Team developer Hardlight.
Sega Europe boss Jurgen Post sent staff an email this morning notifying them of the cuts, as well as the sale of Company of Heroes and Dawn of War developer Relic Entertainment. The layoffs affect approximately 240 roles across Sega Europe, Creative Assembly, and a “small number” at Hardlight. Football Manager developer Sports Interactive and Two Point Hospital developer Two Point Studios, also owned by Sega Europe, were not mentioned.
Sega did not disclose how many staff at each studio were affected, but did issue IGN an additional update on the status of Creative Assembly’s upcoming projects: “Creative Assembly continues to have multiple projects in development with Total War and a new unannounced project.”
Post said the sale of Relic had been agreed and the studio is transitioning to become independently run, which means it is no longer part of Sega. “Sega is working closely with Relic on this shift, and we wish them the best for the future,” Post said.
Relic issued a statement of its own, saying it had become independent with the help of an unnamed external investor. It added that work on updating real-time strategy game Company of Heroes 3 continues, and indeed it will continue to support its games.
Important Update from Relic Entertainment pic.twitter.com/nCcF8olDaC
— Relic Entertainment (@relicgames) March 28, 2024
Post then apologised to staff at Sega Europe, and insisted the cuts were necessary “to secure the future of our games business”.
“Before I go on, I want to sincerely apologise for the worry and understandable distress this news will cause, particularly for those directly affected. These decisions have been incredibly tough to make, and they follow meticulous consideration and deliberation with leadership teams across the business. Change is necessary to secure the future of our games business, and to ensure that we are well placed to deliver the best possible experiences to our players going forward.
“We need to streamline, focus on what we are good at, and position ourselves as best we can for the road ahead. In order to do that, we need to respond to the changing economic landscape and the challenges we’re facing in the way we develop our products and bring them to market.”
Post then apologised to any staff who found out about the layoffs from social networks or the media before Sega itself. “Sega Sammy Holdings made a declaration regarding this news to the Tokyo Stock Exchange moments ago,” Post said. “Due to the nature of this announcement and our legal obligations in Japan, we were unable to share any detail with you until now. That is far from ideal and means some of you may have read about this in the media or via social networks before seeing this email. If that is the case, I’m sorry.
“Again, I want to reiterate that these are not decisions we take lightly. Every affected employee will be treated with respect and compassion, and you have my commitment on the following:
“We will provide support to affected employees where we can, including severance pay, career support and access to independent and internal guidance. We will adhere to the proper regional processes for redundancy. We will communicate individually with everyone affected to offer as much transparency on this process as we can. More details relating to impacted business areas and associated roles will be communicated in due course from within the affected business units.
“I fully appreciate this means we are moving into a very unsettled phase, and I ask that we all look after each other through this difficult time.”
These layoffs are the latest at Sega Europe and across the video game industry in what is one of the toughest times for developers in recent memory. In May 2023, Sega Europe laid off 121 employees from Relic. Then, in September, Sega canceled Hyenas, the multiplayer extraction shooter in development at Creative Assembly, with a source telling IGN the entire development team faced redundancy. Late last year, Total Assembly released Total War: Pharaoh, which has struggled to find an audience. The studio also apologized for various missteps it had made with Total War: Warhammer 3 DLC.
In January of this year, Sega of America laid off 61 staff as it moved to outsource QA and localization, a move which impacted AEGIS-CWA union members. At the time, the union said it was able to negotiate to double the number of saved jobs, and offer severance to temporary workers.
Overnight, AEGIS-CWA announced they had ratified their first contract with Sega, less than a year after their recognition as a legal union. The contract includes a number of worker protections, including raises for all unit members (roughly 150 full-time and temporary employees), Just Cause protections, layoff protections including a recall list and severance, commitment to crediting all workers on games they work on, and a number of other benefits.
Wesley is the UK News Editor for IGN. Find him on Twitter at @wyp100. You can reach Wesley at wesley_yinpoole@ign.com or confidentially at wyp100@proton.me.
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