Sega of America, part of Sega Sammy Holdings Inc – ADR SGAMY, faced accusations of attempting mass layoffs in retaliation for employees’ unionization efforts. The Communications Workers of America filed an unfair labor practice complaint against Sega, claiming it forced employees into a meeting where they were informed of impending job offshoring to Japan and Europe, impacting about 40% of unionized staff, primarily in quality assurance and localization roles.

The Allied Employees Guild Improving Sega (AEGIS-CWA), representing more than 200 employees, stated that Sega breached standard negotiation procedures with the union by proposing to phase out temporary workers by February 2024. Instead of engaging in negotiations with the union, Sega directly informed employees of the layoffs in a mandatory meeting, potentially violating rules against bypassing union involvement. The downsizing would affect around 80 employees, which accounted for 40% of the entire group.

Sega’s actions occurred amidst industry-wide cost-cutting measures, with gaming companies aiming to reduce expenses and downsize. The union demanded Sega to convert temporary positions to permanent ones and return to negotiations transparently and fairly, despite filing a complaint with the National Labor Relations Board, the resolution might not prevent imminent layoffs.

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