Sega Europe laying off 240 workers, selling off Company of Heroes developer Relic

Sega Europe laying off 240 workers, selling off Company of Heroes developer Relic

Sega Europe announced Thursday that it’s selling off Company of Heroes 3 and Age of Empires 4 developer Relic Entertainment while cutting approximately 240 jobs across several other Sega Europe studios.

Relic Entertainment confirmed that it’s going independent with the help of an external investor; under this new structure, it’ll continue to support Company of Heroes 3 and its next update coming in April. “This is a huge change for us, but one thing does not change: we want to create amazing experiences for our players,” read a post on the company’s X account (formerly Twitter). Sega’s shares of Relic were transferred to a holding company that is “to be newly established by the UK investment company Emona Capital,” according to Sega’s financial disclosures. Emona Capital is also invested in Amber, a game development services company; it invested $20 million into that company in 2022.

In its final disclosure statement, Sega Europe said that it’s laying off 240 people “with the aim of optimizing fixed expenses.” Impacted studios include Sega Europe, Creative Assembly, and Sega Hardlight, according to GamesIndusty.biz. Sega Europe expects to record roughly $10 million, or 1.5 billion yen, in losses related to the “business restructuring.” These layoffs follow cuts at Sega in 2023, when the company canceled Hyenas, a shooter from Creative Assembly. Two hundred fifty people were laid off at that time, Sega Europe confirmed in Thursday’s statement. In the seven months since Hyenas’ cancellation, that means around 500 people have been laid off from Sega. That’s on top of 121 redundancies at Relic Entertainment in May 2023.

Polygon has reached out to Sega Europe for comment.

Sega Europe blamed its restructuring on a “reactionary decline from the stay-at-home demand in COVID-19 and the economic downturn due to inflation, which led to lowered profitability for the company. Experts told Polygon earlier this year that there was record growth during the pandemic, creating a “collective delusion” that the growth would hold forever. It didn’t, and the industry is back to incremental growth as executives rode short-term gains over long-term sustainability. That, plus other shifts the business of video games, have contributed to the period of volatility that’s currently straining the industry’s workers. Industry trackers put the number people laid off from the video game industry in 2024 at over 8,000. More than 10,000 people were laid off in 2023.

This is all in contrast an announcement Sega of America workers made yesterday: The Allied Employees Guild Improving Sega (AEGIS) voted Tuesday to ratify their first collective bargaining agreement with Sega. The group of around 150 workers won base raises for all employees, layoff protections, and improved crediting to game developers. Another major win for the union is just cause protections; California, where the Sega of America office is located, is an at-will employment state, meaning companies can fire employees for any reasons, as long as it doesn’t violate workplace protections against discrimination and other laws. Just cause protections require the employer to follow guidelines to prove there is a “just cause” to let someone go. Sega of America laid off dozens of workers earlier this year — before the union contract was ratified — and AEGIS was able to negotiate to save some jobs.