Sega is selling off Relic, and laying off 240 workers

Sega has announced that 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 by IGN, the layoffs will hit Sega Europe, Creative Assembly, and Hardlight. The layoffs will reportedly not affect Creative Assembly’s ongoing work on Total War and 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’s Company of Heroes 3. 

This will be the first time that Relic has been independent since it was acquired by THQ back in 2004. Sega bought the studio during 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 ago Sega laid off 121 employees at Relic and canceled an FPS game called Hyenas being developed by Creative Assembly, despite announcing five titles—some which look to be going for a live service model—during the 2023 Game Awards.

Kotaku is keeping a count of all the video game industry layoffs this year, and we’re already approaching last year’s shocking total of 9,000. 2024 is still young, so we’d better strap in for a rough ride.