Sega Cuts Workforce As Part Of MobilePC Reorganization

SAN FRANCISCO -- Sega of America will be reducing its workforce as part of a "group structure reform" to redirect its attention on digital PC and mobile games, according to its Tokyo-based parent, Sega Sammy Holdings Inc.

To reduce labor costs and streamline its packaged games business overseas, Sega said it will offer early retirement to around 300 employees and seek to "rightsize" a tacit number of other people. The company had a workforce of about 2,200 at the end of its 2013 fiscal year.

Additionally, Sega of America will shutter its San Francisco headquarters and move to southern California. The move is intended to reduce fixed corporate expenses. A Sega official told Eurogamer that the restructuring will only affect a limited number of employees in Europe.

Sega's workforce reduction signals a move away from console games and a new focus on "digital games, centered around smartphone and PC online gaming, as a growth area." A number of popular Sega games, including Super Monkey Ball, Crazy Taxi and two Sonic titles, have already transitioned to mobile platforms.

Once a major developer of console hardware, Sega has struggled to sustain its brand since becoming a third-party publisher in 2001 (when it discontinued Dreamcast).

After being acquired by pachinko maker Sammy in 2004, the company cut 400 jobs after an extremely weak fiscal performance in 2008. Sega's Japanese arcades and pachinko business have been the source of strong earnings for the past decade.

Sega has projected net sales of $3.14 billion for 2015, slightly down from fiscal 2014 estimates. The company also anticipates to earn $33.9-million in profit in 2015, a substantial decline from its $260 million profit earnings of 2014.

Sega's arcade amusement machine division underwent a consolidation in 2011. | SEE STORY