Sega plans massive cuts

Sega has announced plans to reorganize itself in a round of cuts that will include the closure of its San Francisco U.S. base.

The company today stated that it would be “downsizing” in order to “establish a structure which can constantly generate profits.” Around 300 jobs are likely to be lost, as the firm moves to focus its energies on digital PC and smartphone releases as well as merchandising around the Sonic brand.

“Local organizations managing packaged game software in Western markets will be streamlined,” stated a financial release. “In the U.S., Sega of America, based in San Francisco will be relocated to Southern California by this summer and its existing office in San Francisco will be closed thereafter, which results in reducing fixed expenses, mainly in corporate functions. In addition, the Sonic and merchandising businesses will be reinforced to establish a structure which can generate stable profits.”

For its last financial year, Sega made a small operating profit, following on from massive losses the year before. Its arcade and packaged goods businesses have seen steady decline as it has sought growth in downloadable and mobile games. Last year the company announced lay-offs in its European and U.S. offices.