Sega Sammy Reduces Workforce, Focuses on Japan Integrated Resort Casino

Posted on: January 18, 2021, 12:27h. 

Last updated on: January 18, 2021, 12:52h.

Devin O'Connor @CasinoorgDevinO Read More
Expertise: Asia Pacific Gaming, Commercial Gaming, Legislation, Politics.

Sega Sammy, an amusements company invested in arcade and video games, as well as pachinko machines, is reducing its workforce.

Sega Sammy Japan casino integrated resort
Sega Sammy is spending money to hopefully make money. Company CEO Hajime Satomi, seen here last year with his wife, said the firm is paying more than 700 workers to depart, as it moved forward with its casino resort goals in its home country of Japan. (Image: Forbes)

The Japanese publicly traded company confirmed that 729 employees have voluntarily agreed to depart the group. Sega Sammy launched a voluntary redundancy program last year in an effort to cut its overhead costs in the wake of the pandemic.

Workers who offered to resign are afforded retirement compensation and special severance packages. Sega Sammy will also assist outgoing employees with reemployment assistance.

Sega Sammy said it sought to reduce its total workforce by 650 positions. The company agreed to extend that number because of employee interest. The jobs will become terminated effective February 28, 2021.

Sega Sammy says the voluntary program is expected to cost JPY9.5 billion (USD$91.5 million). The company will incur the expenses as extraordinary losses in its current fiscal year, which ends March 31, 2021.

Sega Sammy was formed by the 2004 merger of Sega Corporation and Sammy Corporation. Sega is known globally for its arcade and video game consoles and games, including Sega Genesis and Sonic the Hedgehog. Sammy is a manufacturer and distributor of pachinko games, a popular amusement in Japan.

Current Business

Sega Sammy reducing its total workforce by 729 positions is roughly eight percent of the company’s payroll. The reduction, the company says, will put it in a better financial position.

Voluntary retirement is believed necessary to realize cost reductions focusing on fixed costs and building a more efficient system in order to achieve an early recovery of profits and sustainable growth in the future,” an investor relations statement explained.

Along with its video games and pachinko businesses, Sega Sammy owns and operates two resort destinations. Both properties were hit hard by COVID-19 and the reduction of business.

Paradise City, which opened in 2017, is South Korea’s first integrated casino resort. Located at Incheon International Airport, the casino floor has 300 slot machines and roughly 150 table games.

Sega Sammy additionally owns Phoenix Seagaia Resort in Miyazaki City, Japan. The non-gaming resort opened in 1993.

Yokohama Mission

Sega Sammy hopes to expand its resort business by winning one of Japan’s three forthcoming casino permits. The company is targeting Yokohama.

Despite some public opposition, including a citizen-led ballot referendum effort, the Yokohama City Council is moving forward with its entry into the integrated resort race. Sega Sammy will have plenty of bidding competition in Japan’s second-largest city.

Melco Resorts and Wynn Resorts, two companies licensed in China’s Macau, are expected to submit proposals to Yokohama and its home prefecture of Kanagawa. Malaysia-based Genting Group is another party rumored to be interested.

Sega Sammy believes it has an edge because it’s a Japanese company. Central lawmakers in the Tokyo capital have told interested casino operators that they must partner with domestic companies and form consortiums for their proposals.

“We are proud to be the only Japanese company aiming to draw up a grand design for a full-fledged resort,” a 2019 Sega Sammy statement read. “We believe this to be our biggest advantage.”