Sega to Undergo “Structure Reform”, SOA Office to Relocate

Sega to Undergo “Structure Reform”, SOA Office to Relocate

by January 30, 2015

“Sonic and merchandising businesses will be reinforced”

We have word just out of Sega Sammy Holdings in Japan of significant changes coming to Sega corporation.

In a statement released today, Sega Sammy has announced Sega’s American headquarters will relocate to southern California by this Summer, with the San Francisco office to close but the Sonic brand to remain (our emphasis in bold):

Local organizations managing packaged game software in Western markets will be streamlined. In the U.S., Sega of America, Inc. based in San Francisco will be relocated to Southern California by this summer and its existing office in San Francisco will be closed thereafter, which results in reducing fixed expenses, mainly in corporate functions. In addition, the Sonic and merchandising businesses will be reinforced to establish a structure which can generate stable profits.

We do not know how the European division will be affected. (If you know, please send us a news tip.) We also do not know how many of the 120 “voluntary retirements” announced today in the division–basically a buyout offer–will take place at SOA. In all, it’s expected 300 employees company-wide, not just at the Sega division, will be offered the option to leave, according to the release. We also do not know how many of the current SOA employees will make the move south, or be offered the opportunity. Again, if you know something on this front, please tip us.

This is all part of the company’s continued efforts to focus on growth in digital games and the PC market. But it won’t just be the games side most know that will be impacted; the release also claims the amusement business division will also face severe scrutiny:

SEGA will review its business structures mainly in Amusement Businesses and will narrow down product lineup and withdraw or consolidate and downsize some of the services.

Sega Sammy expects the buyouts to impact their upcoming fiscal earnings, and will advise on that impact when they crunch the numbers.

In Japan, Sega Sammy’s stock has ticked up one percent on the news.

This is a developing story. Our team of reporters will be combing through their sources to bring you more on this story. Keeping checking back as we afford new details on what will be another rocky chapter in Sega’s recent history and how it will impact the Sonic brand.