SOA Now “Digital” Division with 36 Cuts, 37 in Europe
The center of Sega’s video games operation is now squarely focused on Europe, with American offices now serving as a “digital division” for the company, focused almost exclusively on digital content.
Those changes–along with 73 layoffs to complement the dozens already lost when Sega Studios in San Francisco closed, are part of a major restructuring stategy for Sega, as reported by the website Industry Gamers. It may be Sega’s most significant restructuring since the company announced in January of 2001 it would no longer be in the business of making home consoles.
“This is very much administrative reorganization,” Sega West head Mike Hayes told the website, “because clearly we want to be very successful with digital globally. Likewise, we want to continue to be successful with traditional goods. So the reorganization 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.”
As it stands now, console and PC development will mostly happen in Europe, with development of downloadable content, social media, and other digital efforts happening at Sega’s San Francisco offices.
In a separate statement given to 1UP.com, Hayes says the restructuring rendered several employees redundant.
“There was a lot of copying between both San Francisco and London,” he said. “So it’s kind of a natural question of how do we become more efficient and affective as an operation, and that’s what the exercise has been.”
Thirty-six of those layoffs happened at Sega of America–15 percent of its domestic workforce, while 37 pink slips, or 10 percent of the local workforce, were handed out at the Sega Europe offices in London. It does not immediately appear Sega’s community teams on either ends of the Atlantic, including Kevin Eva in Europe, RubyEclipse in America, and others, are impacted by the layoffs and restructuring.
Also not impacted with the changes are Sega’s current and future retail releases. However, the moves do explain why assets related to Sonic the Hedgehog 4 were recently moved over to Sega Europe.
Hayes assured in his interview with Industry Gamers that the restructuring idea stemmed from western managers and not from Sega of Japan–amid concerns that the parent company, Sega Sammy Holdings, lowered fiscal year revenue expectations last week despite increasing profit forecasts.
“This was an initiative taken by the West,” Hayes said. “We wanted to figure out how to be more effective in this incredibly growing marketplace and how to be more cost effective.”
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Not too surprising that they’d lay off the American jobs… with the insanely high taxes in this country at the moment, especially in the state of California (why any business would want to work there right now is beyond me) would drive any business out of the country. Perhaps tax breaks and less federal spending would help but asinine liberals in Congress would never consider that.
I hope this benefits the quality of the products and the company overall.
Im a UK ^_^ is this article good or bad? lol
…I might actually think this is a good thing for SEGA. While I definitely don’t think digital is 100% our way of the future, it is a growing indutry that both professional and indie developers are taking full advantage of.