Sega hasannouncedthat it will be selling Relic Entertainment and laying off approximately 240 employees across its European studios.
Sega attributes the structural reforms to “the business environment surrounding the Consumer area, especially in European region” rapidly changing, citing “reactionary decline from the stay-at-home demand in COVID-19 and the economic downturn due to inflation,” as well as lowered profitability.
According to an internal email obtained byIGN, the layoffs will hit Sega Europe, Creative Assembly, and Hardlight. The layoffs will reportedly not affect Creative Assembly’s ongoing work onTotal Warand another unannounced project. In the email, Sega Europe managing director Jurgen Post explained some of the reasoning behind the company’s latest decision: “We need to streamline, focus on what we are good at, and position ourselves as best we can for the road ahead.”
He apologized for the stress the layoffs will undoubtedly cause and specifically apologized for not being able to tell employees about the move until Sega Sammy Holdings made the announcement to the Tokyo Stock Exchange. According to Post, Sega will provide support to affected employees where it can, including severance pay, career support and access to independent and internal guidance.
What’s next for Relic
As part of this move, Sega is selling Relic, and the studio is going independent. Relic made its own announcement on social media, saying, “With an external investor, Relic Entertainment will become an independently-run development studio.” It plans to continue supporting its current projects, like last year’sCompany of Heroes 3.
Important Update from Relic Entertainmentpic.twitter.com/nCcF8olDaC
This will be the first time that Relic has been independent since it was acquired by THQ back in 2004.Sega bought the studioduring THQ’s bankruptcy in 2013. Were it not for the larger context surrounding the announcement, Relic going independent would be pretty exciting. But not quite a year agoSega laid off 121 employeesat Relic andcanceled an FPS game calledHyenasbeing developed by Creative Assembly, despiteannouncing five titles—some which look to be going for a live service model—during the 2023 Game Awards.
Kotakuis keeping a count of all the video game industry layoffs this year, and we’re already approaching last year’sshocking total of 9,000. 2024 is still young, so we’d better strap in for a rough ride.
