Sega Of America Set To Lay Off 61 Employees In March

Been a brutal year for mass layoffs in the game industry and it's disgusting.

Oef what is happening, geez. I work in the IT, and here also 20% gone.

It isn’t just the games industry to be fair, many industries are shrinking staff and pushing productivity increases. A lot of the money from a few years ago has dried up, or interest rates are too high for current loans that cash flow is being impacted (not necessarily profit or valuation before someone chimes in with that) plus real estate shrink (for offices that closed physically or that now have higher leases so they need bodies on buildings). Plus all that tax payer funded or cheap loan money meant a lot of companies overhired to accommodate the different landscape of the past few years so now they are correcting. Especially since consumers might be spending but their buying habits have shifted (someone may be spending more but it’s on groceries and not on other goods). It’s a mess but going to happen likely into 2025. All I can say is skill up (or side hustle), keep your resume updated and be fiscally responsible. Even if you feel your job is stable.

@JohnnyMind Apparently it's illegal to do this in Japan. Not without severe cuts to other areas of business first.

Bottom line is games development is getting more & more expensive. Companies are suffering, that's why originality is scare nowadays. Devs just make games for maximum sales. Unfortunately it doesn't work that way.

Ebb and flow... That's really all this is. There are tons of reasons why this is happening and it's not just the games industry. At the same time, here in the Netherlands, we have a major shortage of people in a lot of sectors, but mass lay-offs are also happening at the same time. It is what it is.

I love how considerate all these companies are. this isn t limited to the gaming industry, but all major companies chose January for their ...."restructure" or "re-org".
Not during xmas season!!! We are not heartless greedy a-holes!!! Just 15 to 31 days later.

@Axelay71 "Bottom line is games development is getting more & more expensive."

That's partly a choice of developers and publishers. Not all games need to be epic AAA photo-realistic titles. The indie game scene is thriving in recent years.

We're not even in February yet and we already have 2,491 confirmed layoffs in 2024.

1,900 at Xbox, including Activision and Bethesda
530 at Riot Games
61 at SEGA of America

Redundant positions or not, I hope everyone affected lands on their feet soon.

@Clyde_Radcliffe That's down to consumers though, if people keep demanding it, they will keep doing it. More companies need to set up studios like the Dave The Diver one.

So here's what I have a problem with. I did a very quick search on Google and found that Sega had a great 2023. They had their highest Net Profit in 13 years! That board room made enough! But hey let's insure that line of profits keep coming in and axe 61 people. Now I could be wrong. My search results could be a lie. But if that's true, and it probably is, shame on Sega.

With all these layoffs in the gaming industry, I wonder what the layoff stats are for the work at home employees vs in-office employees. Are remote workers more expandable?

@Clyde_Radcliffe hey totally agree, games have got to big for their own good in recent years. Personally I don't care for these endless open world crap fests. But unfortunately a lot do. But slowly it's killing the industry with ever growing costs, and demands from players. Indie scene is definitely becoming more interesting.

Not surprised. Sega of America should have focused more time on their core business, rather than engage with in the usual tiresome socio-political virtue signaling.

If the people being layer off are developers, I hope they can land on their feet and find new work soon.

But if they're in the localization team, after that interview came out about how the new Yakuza Devs go to western teams to ask what is appropriate to put in their games instead of of just doing what is appropriate for their own culture, I say good riddance and I hope they leave this industry altogether.

@Dman10 a lot of companies are issuing return to the office demands. Problem is many closed offices or have employees that moved to cheaper areas while usually not really offering raises that match the cost of living increase in the office area. So some people will have to literally move (sometimes long distances) to keep jobs they have proven don’t require an office.

Wow a company followed the WARN notice? That’s about as rare as a driver following the speed limit. 😝

Now imagine if all people who lost their jobs came together and formed a new gaming company...

@dkxcalibur profits isn’t the same as cash flow (or rather operating cash) and it doesn’t change other factors that impact layoffs. If a company doubles the price of a product but sales dip a quarter they still make a profit but a couple factors. They can’t afford to make as much product safely (better to have demand than excess supply as that costs money), they are now paying for too much staff, and they likely have increased costs to make/store/ship said product. And that profit they made pretty much has been divided up before they get it (think how you are automatically missing takes from your pay your money is allotted before you get paid. ), to pay for other things (rent/utilities/currently negotiated contracts/stock dividends etc) not to mention they have to have a certain amount of liquidity for opportunity (and debt). Not to mention layoffs cost money (everyone forgets that) as you usually have severance packages, knowledge loss/training/ work distro adjustments, plus you may have to hire/train again later in the year.

Companies don’t function like household budgets. Profit doesn’t mean “oh hey we can spend this on payroll so big raises and no layoffs ever” and even if they do you still have bad employees that need to be culled. No one is owed a job and loyalty is only as good as how you benefit from it (this goes both ways which is why you should always skill up, and save your money in case you end up on the chopping block.) Problem is people put themselves in positions where they need companies not the other way around. Then they get mad/hurt when companies do what’s best for companies. Put yourself first (have an emergency fund, try to keep debt manageable, save and invest (especially if your company has a stock buy plan), keep skilling up). Working is about leveraging advantage.

@Ryu_Niiyama I don't know. I think layoffs should be avoided at all cost; kind of like parenthesis inside parenthesis.

Man it's the recession all over again. When business is slow, this is what happens.

@dkxcalibur I like what you're saying here, but I wouldn't want to lay down a hard and fast rule like what you're proposing.

If companies are convinced that layoffs are absolutely necessary... so be it. I would accept that - provided that they were already paying the full social costs of hiring people in the first place. Especially given the profits these companies have been turning, year after year, while so many countries have been dealing with crisis after crisis, economic contraction, even war.

That means real, proper living wages for everyone. Paying for transit passes/commuting costs if you insist people need to work in the office. Mandatory overtime for crunch, even for salaried employees. Job security. Collective bargaining. Proper healthcare, especially in the USA. The works.

What I see now is that so many companies are freeloaders: they pass the social and financial costs of precarious employment, traffic, employee burnout, health care and caregiving on to... everyone else. While they skim the profits. As if that weren't enough, they constantly threaten to move their operations to low-wage, low-human rights jurisdictions if we don't give them even more.

If our societies demanded that they pay their fair share, if the playing field were level between employees and companies, then - yes, I'd say: go right ahead and engage in layoffs when it's easy and convenient for you. You can take the reputational damage and implication that you're bad managers. In that world, the employees - you know, the ones who actually make these games - would have the option of going elsewhere...

Maybe they had exactly 61 bad localizers currently earning the ire of people?

Ah good ol' capitalism at work here. Its the best system ever am I right?

@dkxcalibur that is impossible. Even if a company was a benevolent organization that had a ton of money to just give out raises and whatnot you still have bad employees. Or redundancy positions. A company can’t function like a safety net. And it shouldn’t really as a person is providing a service (work) for payment (paycheck/benefits) and just like any consumer a company is going to go with who provides the best service for the best price. As a consumer you do that every day. You don’t buy from a company just because it’s that company no matter how bad the product gets. That would be insane. What you are asking for requires for the company to have positive cash flow all the time, be managed well (as in never over/under hire) and have top of the line productive employees. That is great for a projections model but falls apart instantly in real life. Unless you are self employed. That is about the only way that works with no adjustments. (If your business doesn’t close).

Plus that doesn’t account that people flow in and out of jobs on their own. Even in ye olden days companies shed employees.

@Ryu_Niiyama ......not really talking about "firing" an employee. I'm referring to laying off employees primarily as a way of cutting cost. I also understand that it's not practical to never layoff employment. I just feel that it's done more casually these days with little thought process of how it effects a person. The amount of wasted resources and funding that big corporations have every single day is crazy. Yet, it's easy to just layoff someone. We don't want to dip into the CEO's yearly bonus!

IF it's their localisation team by all means get rid of them. The bad localisation staff need to go.

If marketing then well get better marketing staff to make better ads/trailers or change tact.

If it's staff that were actually vital on the western side and not ruining the games coming to the west then that's just sad IF we get the bad staff left in the company and the good staff going away.

I may sound negative and people need their jobs and if they can get others well good luck out there for sure.

But if Sega/Bandai have bad western staff ruining products and they don't change their minds and ruin the development or the regional changes of a product when we just want a more suitable product's vision but enough translation to get the point across.

Why should I support those products. Granted I haven't bought any in the series that they have made changes to anyway but if it effects other Sega IPs I do enjoy I won't buy any that do interest me if they do change them too much in awkward ways.

@dkxcalibur sorry took me a bit to respond. I’m referring to both (but the bulk of my comments were about layoffs) because they are kinda lumped together. Which is why I talked productivity as well as operational costs. You can’t consider one without the other and that shakes out to layoffs and firings. Both are required to keep a company properly maintained. As such my previous comments still stand.

As for CEOs while I certainly feel they are overpaid and they have negotiating power that most average employees (again skill up ) don’t have or leverage because we are afraid to negotiate, they do provide a specific service (securing investment capital, and company guidance/structure) and if they do their job properly they do actually earn that high salary (again maybe not at the rate they get it in the west but that is now the standard and you kinda but not always get what you pay for). And a lot of CEOs will performatively cut their salary (while increasing stock options) as a tax hedge and it still only helps the employees short term. Because companies still have to walk the best value for best (not necessarily cheapest) price line. Companies don’t want to pay CEO salaries tbh, (at least ones with shareholders/board of directors don’t) but they do so because of the value (and yea sometimes nepotism) CEOs bring. It’s not a one or the other. Less CEO salary (without accounting kung fu and cash reserves) will not equal more paychecks or more time an employee stays on.

Your focus on the “person” is onesided and idealistic imo (but most people only see the view point that works out for them or those they empathize with so it is what it is). I would rather a company shed employees (who again should have been skilling and saving so if such a thing happens they can adapt) so the rest of the employees can keep their jobs. Rather than keeping a bunch of people that bloat and cost the company and results in the company losing money or potential investments (which means even less gets into employee's bank accounts) or worse going out of business later on and now all the non c level people are in trouble. Especially when in a free market they can go get a job somewhere else. Yes it may take time and yes it may disrupt their home life a bit but only people that do nothing have no value after losing one job. And again a responsible person will have a financial cushion (even if it is a small cushion) for this.

But I think that is enough for today. Fun conversation. Thanks for the replies.