Sega will shed 240 staff across its European studios, and sell off Company of Heroes developer Relic Entertainment as part of a cost-cutting drive.
The majority of job losses will be at Total War developer Creative Assembly and at the publisher’s Sega Europe office. These follow earlier cuts to the UK-based Creative Assembly last year, after the cancellation of live-service shooter Hyenas.
The Vancouver-based Relic will become an independent studio, meanwhile, backed by an unnamed “external investor”. In a statement posted to social media this morning, Relic confirmed Company of Heroes 3 support would continue. The developer has also recently faced layoffs, with 121 staff let go in May 2023.
Newscast: Why are there so many games industry layoffs?
A “small number” of jobs will also go at Sega Hardlight, another UK studio, and the developer behind mobile game Sonic Dream Team.
Sega announced the changes this morning in a business update where it formally blamed a “rapidly changing” financial landscape, including “reactionary decline from the stay-at-home demand in Covid-19 and the economic downturn due to inflation, etc”, meaning “profitability has been lowered”.
In an email to Sega staff seen by Eurogamer, the company’s European boss Jurgen Post apologised that this update had been made public prior to some staff hearing about the job losses personally.
“Due to the nature of this announcement and our legal obligations in Japan, we were unable to share any detail with you until now,” Post wrote. “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.
“I want to sincerely apologise for the worry and understandable distress this news will cause, particularly for those directly affected,” Post continued. “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.”
Xbox boss Phil Spencer recently stated he was “concerned” over layoffs due to lack of industry growth, following the departure of 1900 people across Xbox and Activision Blizzard in January of this year. Across the video games industry as a whole, more than 15,000 people are thought to have been let go over the past 18 months.
For a detailed look at the business reasons behind the recent wave of video game industry layoffs, Eurogamer published a detailed explainer of what exactly is going on.
