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Sega Cuts Profit Expectations by Whopping 530%, Looking to Axe 560 Employees

by Chris Faylor, Feb 10, 2009 9:58am PST

Noting that it has "failed to swiftly respond to sharp changes in the business conditions," Sega has announced that it is soliciting applications for 560 employees, roughly 18% of its workforce, to retire by the end of its fiscal year on March 31, 2009.

Assuming the company meets its proposed quota, it expects to save roughly $55.1 million on labor costs across its next fiscal year. The studio will also close or sell 110 amusement facilities, and reduce its research and development costs by about 20%.

At present, the Japanese video game publisher and developer expects to post a net loss of $236.9 million for the fiscal year, instead of its previously expected $55.1 million profit. That means its expectations are down a total of $292 million, roughly 530%.

The company cited weaker-than-expected Japanese video game sales and the weak yen-dollar exchange rate as factors in its lowering is projection.

Despite the lowered expectations, the current fiscal year is still an improvement over Sega's last fiscal year, in which the company saw a net loss of $577.4 million.




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