Sega celebrated its 60th anniversary last month, but the company’s festivities were unfortunately cut short due to the current situation at hand in its home country Japan. The video game giant announced last week that it is selling off its once prosperous arcade business, and it appears that its decision to restructure did not end there. Just recently, Sega Sammy Holdings revealed that it is asking 650 employees to retire voluntarily.
The company explained that the COVID-19 global pandemic has left a significant impact, which in turn forced Sega Sammy to sell its arcade business to Tokyo-based Genda Co. Ltd. According to Kotaku, the deal between the two companies is set to be completed in late December this year, where Genda will then take control of over 200 Sega operated arcade centers in Japan next January.
“As part of initiatives for structural reform to date, we announced the transfer of a portion of the shares of a consolidated subsidiary engaged in the operation of amusement facilities on November 4, 2020,” wrote Sega Sammy in an official statement. “However, in order to recover earnings at an early stage and achieve sustainable growth in the future, we consider that it is necessary to promote cost-reduction centered on fixed expenses and build an even more efficient system and decided to call for voluntary retirement of employees.”
The 650 full-time employees who will voluntarily retire are promised by Sega Sammy to receive “payment of extraordinary retirement allowances” and reemployment support. In addition to this, the company is also cutting down the salaries of its executives including its representative director, senior executive vice president and senior vice president who will be seeing 30%, 20% and 10% monthly pay cuts respectively. Performance bonuses will not be paid out to Sega Sammy’s directors based on this year’s financial forecast as well.
The company may have reached its 60th anniversary milestone, but this year has shown that establishment isn’t enough to secure survivability during these trying times. To voluntarily resign is indeed a tough pill to swallow for any individual, and seeking employment during the current pandemic is yet another challenging hurdle to overcome.