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Sega lays off 240 workers and sells Company of Heroes 3 studio

A woman holds a gun in Company of Heroes 3's reveal trailer.
Relic Entertainment

Sega Europe is going through some major restructuring, and as a result, it is laying off about 240 developers and letting Warhammer 40,000: Dawn of War and Company of Heroes developer Relic Entertainment spin off as an independent company.

Although Sega’s Japanese developers are known for their platformers, action games, and RPGs, its European output is more strategy game-focused. A key component of that was Relic Entertainment, which has made games like Warhammer 40,000: Dawn of War III, Age of Empires IV, and Company of Heroes 3 over the past decade. With the help of investment company Emona Capital, Relic is buying itself back from Sega and going independent for an undisclosed amount. Relic addressed going independent on X (formerly Twitter) with a message.

Relic Entertainment's message about going independent.
Relic Entertainment

About one week later, layoffs followed at Relic Entertainment. 41 developers were let go. “Earlier today we shared details with Relicans about a layoff. Letting people go was not an easy decision, and was made solely with the goal of providing Relic the best possible chance to survive in an increasingly volatile industry,” the studio wrote on LinkedIn. “It does not in any way reflect the expertise, passion, or character of any of the impacted employees. We are working closely with those affected providing severance packages, extended benefits, and outplacement support options. To those we are saying goodbye to, we are deeply sorry that it has come to this. We thank you for everything you have done for our studio and our projects, and we wish you all the best.”

Unfortunately, Relic Entertainment developers weren’t the only ones laid off during this restructuring. In a press release put out the day Relic Entertainment spun off to be independent, Sega confirmed it “decided to reduce headcount by approximately 240 roles at several bases in the European region with the aim of optimizing fixed expenses.” Reporting from IGN has clarified that studios impacted include Sega Europe at large, Creative Assembly, which is best known for making the Total War series of strategy games, and Sega Hardlight, which put out the Apple Arcade exclusive Sonic Dream Team just last December.

IGN shared an email from Sega Europe Managing Director Jurgen Post, who further apologized for the layoffs. “Before I go on, I want to sincerely apologize for the worry and understandable distress this news will cause, particularly for those directly affected. These decisions have been incredibly tough to make, and they follow meticulous consideration and deliberation with leadership teams across the business. Change is necessary to secure the future of our games business and to ensure that we are well placed to deliver the best possible experiences to our players going forward,” Post said.

These layoffs did not seem to impact Sega employees in the United States or Japan. In fact, Sega of America employees just successfully unionized on March 27, so they’ll have more protections if layoffs like this happen to them.

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Tomas Franzese
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