Published in Games
Sega Sammy seeks to cut costs by 20%
by David Stellmack on11 February 2009
Soliciting voluntary redundancies
As losses are mounting for Sega Sammy, the company is looking to slash research and development costs by at least 20 percent. As part of this process, the company is soliciting voluntary redundancies from around 560 employees to help with the process.
In addition, Sega Sammy will be closing 110 amusement facilities, which will put approximately another 3,200 employees out of work. Sega Sammy has experienced losses for the last nine-month period that total more than $118 million. Actually, this is an improvement over the same period last year, but hard to believe when the company says that net sales have decreased by 15.4 percent over the same period from last year.
With the weakened economy Sega Sammy is like many other publishers that are struggling to survive. The Sammy division responsible for the company pachinko and pachislot coin-op business has been hardest hit, with net sales of only $58 million.
The video game side of the business, which is operated under the Sega arm of the company, has seen a decrease in demand for its titles in the Japanese market space, but sales were holding their own in North American market space. Leading the charge for Sega were Sonic Unleashed, Football Manager 2009, and Mario & Sonic at the Olympic Games, which led the video game division on copies sold.
According to analysts, Sega Sammy might have to deal with more severe belt tightening to weather the current economic climate, and many expect more layoffs before it is all said and done.