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Sega announces layoffs and sale of Relic Entertainment

In an effort to cut costs, Sega announced it would lay off 240 employees across three subsidiaries and sell Relic Entertainment to outside private investors.

The layoffs will be spread across Sega’s three subsidiaries: Sega HARDLight (responsible for several Sonic the Hedgehog games), Sega Europe and Creative Assembly (developer of the popular Total War series).

Relic Games said in a post on X that they plan to continue supporting Company of Heroes 3 and view the transition from a Sega subsidiary to an independent development studio as a positive.

Why did Sega lay off employees and sell subsidiaries?

According to Sega’s press release, the company was forced to make layoffs due to a “rapidly changing” business environment, citing “reduced stay-at-home demand due to COVID-19 and an economic downturn due to inflation,” meaning “profitability has been reduced.” .

Eurogamer was able to see an internal email from Jurgen Post, managing director of Sega Europe, which confirmed that some of the employees who were laid off were informed of the layoffs via social media before hearing about them in person .

“Due to the nature of this announcement and our legal obligations in Japan, we are unable to share any details with you at this time,” Post wrote. “This is far from ideal and means some of you may not be aware of this email before you see it. Mail has learned about this before in the media or on social networks. If this is the case, I’m sorry.

“I would like to sincerely apologize for the concern and understandable pain this news has caused, especially for those directly affected,” Post continued. “These decisions are extremely difficult and come at a time when the entire The decision was made after careful consideration and deliberation by the company’s leadership team.

“Changes are necessary to secure the future of our gaming business and ensure our ability to deliver the best possible experience for future players.”

It’s a tumultuous day for the gaming industry. In addition to Sega’s sale of Relic, Embracer Group also announced plans to sell Gearbox Entertainment to Take-Two Interactive. This is a time of constant change for the industry as a whole.

Featured Image Credit: Relic Entertainment

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