Sega Sammy in the red: lays off 400 employees

Companies focusing on arcade amusement centers like Namco Bandai and Sega Sammy are having a rough time as of late with the growing amount of losses they’ve been experiencing over the past year. Recently, Sega Sammy had to lay off 400 employees just to cut their losses and keep the company afloat. You can find out the reason behind this in the full article.

With the next-gen consoles slowly cornering the video game market over the past few years, arcade amusement centers in Japan have been going through some rough times keeping everything in the green.

The Sega Sammy Holdings merger was just one of the companies that were forced to cut their losses by laying off 400 employees as a response to their cost cutting initiative. The company has already closed 110 unprofitable arcade establishments, as well as reduced pay and bonuses for its managerial staff.

This leaves the company with staff levels of just 3,000 employees after the solicited voluntary retirement incentive pushed by Sega Sammy.

Here’s the official statement released by Sega Sammy chairman and CEO Hajime Satomi:

Due to Sega failing to respond to changing business environment, the operating performance of its core businesses, including the amusement facilities business and domestic consumer business, has not been performing well.

The company has revealed that it has lost around Â¥15.77 billion (US$ 210 million) over the last 9 months of last year, compared to its profit of Â¥49.38 billion in 2006. Forecasts predict Sega Sammy will have a full year’s net loss of around Â¥26 billion (US$ 242.1 million).