Sega announced today that it is laying off 240 staff at Sega Europe, mobile developer Sega Hardlight, and Total War Studios' Creative Assembly. The company also plans to sell its "Company of Heroes" developer, Relic Entertainment, and transition it to an independently operated studio with the backing of "outside investors" in the next few years.

In a statement on Twitter, Relic told fans that the transition to an independent studio is a "big change" for the company, but that it will not affect continued support for Company of Heroes 3 or the 1.6 update scheduled for this April.

While tough to hear, the layoffs are not completely unexpected. Last September, Sega announced that it was undergoing "structural changes" at its European studios after abruptly discontinuing Creative Assembly's live-service shooter Hyena's. Around that time, the company also made a series of cuts.

However, Sega announced this latest round of layoffs and issued a statement directly referring to the "structural reforms" promised in September. According to Sega, the layoffs are in response to "the pullback in demand from the pullback in Covid-19, the economic slowdown due to inflation and other factors," and a general trend of declining profitability.

The layoffs, like the sale of Relic, are intended to "respond quickly to these environmental changes and improve profitability." In a letter to staff (via GI.biz), Sega Europe boss Juergen Post apologized to those affected by the layoffs, but insisted that it was to "secure the future of our gaming business," before adding that Sega and its affiliated studios would "streamline and focus on what we do best We need to streamline, focus on what we do best, and do the best we can for the road ahead."

All of this is fairly formulaic and will provide little comfort to developers currently out of work, but it echoes comments made by Sega in the wake of Hienas' cancellation: in November, in a presentation to investors, Sega said, "We will be working with the Creative Assemblies and the Creative Assemblies to create a new game that is more fun to play. claimed that its promotion of live services with Creative Assembly was due to its intoxication with "the good winds of the early Covid 19."

Like many gaming companies, Sega, or more accurately Sega's staff, probably had little say in the matter at the time of the lockdown, is now reaping the whirlwind of management decisions made as if the consumer shock of early Covid would last forever. In February, we produced a graph showing the impact of 16,000 layoffs across the gaming industry. That graph is now out of date: the job cuts have continued since then.

The problem is so serious and so universal that people like Larian's Swen Vincke and Dwarf Fortress' Tarn Adams have criticized the short-term thinking and greed of management that has supported so many layoffs in the last couple of years and Pointing out this was a recurring theme at this year's GDC.

Yesterday, workers at Sega of America announced that they had ratified the first union contract at a major gaming company. The more time that passes, the more I want to write about this stuff and the less of this stuff I want to do.