Sega of America Layoffs May Lead Gaming Giant to Outsource Localization and QA

Sega Localization Layoffs

The gaming industry is the latest to experience a wave of layoffs. Electronic Arts is reported as cutting more than 650 jobs — five percent of its total workforce. Microsoft is slashing 1,900 jobs at Activision Blizzard, Xbox, and ZeniMax. Sony has decreased its global PlayStation division by eight percent, or about 900 staff members.

So Irvine, California-based Sega of America is not alone in its plans for upcoming layoffs. More specifically, 61 temp workers (i.e., those working on fixed-term contracts) from QA and localization will be let go. 

A California WARN (Worker Adjustment and Retraining Notification) report stated that the layoff would take effect on March 8, 2024.

18 temp workers, however, have been offered full-time positions — up from six originally, after negotiations with AEGIS-CWA, a union representing Sega workers. 

The boost to full-time status is an improvement for those temp workers, who typically work at least 40 hours a week with very few benefits and no clear path to promotion, according to an ex-Sega employee.

Union Efforts

“Through our union efforts, we’ve been able to more than double the number of saved jobs, and to offer severance to our temp workers,” tweeted AEGIS-CWA on January 30, 2024. 

The organization added, “This, however, does not take away from the fact that many of our coworkers are being laid off in a decision we believe will have a negative impact on the working conditions of those who remain with the company, and in the quality of our future games.”

Sega of America is now expected to rely on a mix of existing in-house talent from other offices, supplemented by outsourcing certain work. 

The ex-Sega employee told Slator that increasing the distance between the localization and QA departments by outsourcing one or both departments could result in longer debugging processes and more complex communications — with the potential for misunderstandings and errors.

“The loc department at Sega is staffed by members who have been there 10+ years, and worked on dozens of games in the same franchise,” they added. “Outsourcing some or all of them will jeopardize the consistency of SEGA’s localization.”