Sega of America Walloped by Layoffs; Western Publishing Reduces Focus to Sonic and Three Others

A restructuring in light of steep losses for the quarter ending today means that a lot of people at Sega of America lost their jobs yesterday. But rumors that the entire division is shutting down appear to be unfounded.

Some Sega of America employees, on their Twitter feeds and via this post on Reddit, wrote of being called into an 11 a.m. meeting and being told of the widespread layoffs that they interpreted as a full shutdown. Sega Sammy Holdings, the parent company based in Japan, released a statement yesterday to investors that identified a "reduction of number of titles," that are targeted to the U.S. and Europe, listing four that seem to be protected. Work on anything else is likely terminated.

"We conducted detailed reviews of earnings projections for titles targeted toward the U.S. and European markets and decided to narrow down sales titles from the following period and after to strong IPs," Sega Sammy wrote, "such as Sonic the Hedgehog, Football Manager, Total War, and Aliens, which are expected to continue posting solid earnings. In accordance with this, we are canceling the development of some game software titles."

In a statement published by Joystiq, Sega of America re-named those four series and confirmed the layoffs. "As a result of the SEGA Sammy Board decision to consolidate the business, many of our internal functions will be re-structured and this could result in a number of redundancies within the publishing business across the Western organisation," it said.

IGN reported that QA for North America has been completely shut down, with Sega Europe taking over its functions. Positions in functions like marketing, social media and design also got the axe, IGN says, citing unnamed sources.

The reduction of Western publishing will surely kill off a significant chunk of Sega's portfolio here. In addition to the four franchises named above, western consumers have seen titles like Virtua Tennis, Virtua Fighter, Bayonetta, MadWorld and The Conduit published by Sega over the past three years. No word yet on what this means, specifically, for HD re-release plans for Jet Set Radio. But it probably kills rumors of a similar re-release for Shenmue.

Layoffs Hit Sega of America [IGN]