Sega of America Plans Layoffs, 61 Workers Affected in 2024

by Abdullah Sajid
Sega of America Plans Layoffs, 61 Workers Affected in 2024

Sega of America unveils a plan for layoffs, impacting 61 workers in a move scheduled for March 8, 2024. The announcement follows a California WARN report, providing a 60-day notice as required by law. The affected employees, spanning two offices, face uncertainty as Sega considers outsourcing roles in quality assurance and localization. The Allied Employees Guild voices concerns, citing potential negative impacts on working conditions and game quality.

The layoffs will happen in two offices at Sega’s Irvine, California campus. One office will lose 12 workers, and the other, a bigger group of 49 employees. This announcement follows Sega of America’s recent move where their workers voted to form a union, called AEGIS-CWA. The union reveals that Sega’s management had already shared plans to outsource some jobs in quality assurance and localization a few months back, and this layoff is part of that plan.

“A few months ago, Sega management announced their plan to outsource QA and part of localization in a move that would significantly impact our workforce,” shares AEGIS-CWA. The union worked hard to save as many jobs as possible and help temporary workers with severance. But there are worries about how these layoffs might affect the working conditions for those who stay and the quality of Sega’s future games.

This move by Sega fits into a larger trend of job cuts in the video game industry. Even big companies like Microsoft are cutting jobs, with 1,900 positions gone recently. This trend has affected many studios, including well-known ones like CD Projekt Red and Ubisoft. The impact is so significant that even huge companies like Embracer, Epic Games, and Hasbro had to let go of a lot of staff.

In the midst of this industry-wide challenge, Sega’s decision to lay off 61 workers adds to the difficulties faced by video game industry employees. The ripple effect of such events shows the uncertain job security in an industry that is always changing.

Read Also: Microsoft Initiates Bold Move with 1,900 Gaming Job Cuts in 2024

Details from the California WARN report tell us that there are two separate layoffs planned – one with 12 workers and the other with 49. Both are set to happen on March 8, with the notice date being January 8. It’s important to note that Sega hasn’t officially confirmed these layoffs, leaving the affected employees in uncertainty.

The Allied Employees Guild Improving SEGA (AEGIS-CWA), the union representing Sega workers in the US, expressed its concerns on social media, stating that Sega’s announcement aligns with their previous disclosure a few months ago. The union contends that Sega plans to outsource quality assurance and some localization work, highlighting the potential significant impact on their workforce.

The Communication Workers of America (CWA) had previously filed an unfair labor practice complaint against Sega in November, alleging that the company had signaled its intention to lay off 80 unionized workers. The dispute centered on what the organization described as a “clear case of bad faith bargaining” during a captive audience meeting where Sega presented the proposal.

Despite the challenges faced by the industry and Sega’s specific circumstances, the gaming giant has recently made headlines for refreshing its classics, including Crazy Taxi, Jet Set Radio, Shinobi, Golden Axe, and Streets of Rage. Eurogamer notes that the company’s latest release, Like a Dragon: Infinite Wealth, launched last week, has been a notable success for the publisher.

As the gaming industry grapples with ongoing challenges, the impact of Sega of America’s layoffs on its workforce and the broader implications for the industry remain uncertain. The California WARN notice serves as a formal acknowledgment of the impending changes, but the aftermath and long-term consequences will only become clear in the coming months. Sega, like many others in the industry, faces the delicate task of navigating a shifting landscape while attempting to maintain a balance between business imperatives and the well-being of its workforce.

Sega of America Plans Layoffs, 61 Workers Affected in 2024
Source: Sega

Read More: Microsoft’s Gaming Revenue Soars 49% Thanks to Activision Blizzard Boost

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