TOKYO -- Sega Sammy, parent of "Sonic the Hedgehog" gamemaker Sega, is cutting 560 staffers, 18% of its 3,127 total, and closing 110 of its 322 game arcades in Japan.
It also will slash its budget for research and development by 20%.
At its peak in 1993, the company was operating 1,231 arcades.
Sega said on Tuesday that "substantial operating losses" prompted the cuts. It expects the employee reduction, which it plans to complete by March via voluntary retirements, will save $56 million.
Sega now forecasts a net loss of $239 million for the 2008 financial year, which ends in March. This compares with a $583 million loss the previous financial year.
Contact the Variety newsroom at
news@variety.com