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Sega has announced significant layoffs affecting Sega Europe, Total Warmaker’s Creative Assembly, and Sonic Dream Team developer Hard Light.
Sega Europe boss Jurgen Post sent an email to staff this morning informing them of job cuts and the sale of Company of Heroes and Dawn of War developer Relic Entertainment. The job cuts will affect a “small number” of around 240 positions at Sega Europe, Creative Assembly and Hardlight. Sports Interactive, the developer of Football Manager, and Two Point Studios, the developer of Two Point Hospital, also owned by Sega Europe, are not mentioned.
Sega did not say how many staff members at each studio were affected, but issued IGN with additional updates on the status of Creative Assembly’s upcoming projects. “Creative Assembly continues to develop multiple projects, including Total War and new unannounced projects.”
Post said the sale of Relic has been agreed and the studio is transitioning to independent operations, meaning it is no longer part of Sega. “SEGA is working closely with Relic on this transition and wishes them the best of luck going forward,” Post said.
Relic issued its own statement saying it became independent with the support of unnamed outside investors. Additionally, he added that update work on the real-time strategy game Company of Heroes 3 continues, and indeed support for the company’s game will continue.
Important notice from Relic Entertainment pic.twitter.com/nCcF8olDaC
— Relic Entertainment (@relicgames) March 28, 2024
Post later apologized to Sega Europe staff, insisting that the job cuts were necessary “to secure the future of our games business.”
“Before we continue, I would like to sincerely apologize for the concern and understandable distress this news has caused, especially to those directly affected. Change is necessary to secure the future of the gaming business and ensure we are well-positioned to provide the best possible experience for our players in the years to come.
“We need to streamline and focus on what we do best and best position ourselves for the future of roads. We need to respond to the challenges we face as we deploy.”
Post later apologized to the staff, who found out about the dismissal through social networks and media before Sega itself did. “SEGA SAMMY HOLDINGS recently filed a declaration with the Tokyo Stock Exchange regarding this news,” Post said. “Due to the nature of this announcement and our legal obligations in Japan, we have not been able to provide further details until now. Some of you may have read about it, in which case I apologize.
“Again, these are decisions we do not make lightly. All affected employees will be treated with respect and consideration, and we are committed to:
“We will provide affected employees with all the support we can, including severance pay, career support and access to independent internal guidance. We will be in touch with everyone affected individually and provide as much transparency as possible about this process. For more information about the affected business areas and the roles involved, please see Further notification will be provided by the business divisions that will receive the information.
“We fully understand that this means we are moving into a very unstable phase. We all need to look out for each other as we get through this difficult time. Please distribute them.”
These job cuts are the latest at Sega Europe and the video game industry as a whole during one of the toughest times in memory for developers. In May 2023, Sega Europe laid off 121 Relic employees. And in September, Sega canceled Hyenas, a multiplayer extraction shooter in development at Creative Assembly, and sources told IGN that the entire development team faced layoffs. Late last year, Total Assembly released Total War: Pharaoh, but it struggled to find an audience. The studio also apologized for various mistakes it made with the Total War: Warhammer 3 DLC.
In January of this year, Sega of America 61 employees laid off This move affected AEGIS-CWA members as they moved towards outsourcing QA and localization. At the time, the union said it was able to negotiate a deal that would double the number of jobs saved and give severance pay to temporary workers.
Overnight, AEGIS-CWA announced it had approved its first contract with Sega, less than a year after being recognized as a legal union. The contract includes pay raises for all unit members (approximately 150 full-time and temporary employees), just cause protection, layoff protections including recall list and severance pay, and a game in which all workers are working. It includes a number of worker protections, including a promise to give credit to employees. There are many other benefits as well.
Wesley is IGN’s UK News Editor. Find me on Twitter @wyp100. Wesley can be contacted at wesley_yinpoole@ign.com or confidentially at wyp100@proton.me.
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