Sega of America, Discord, and Twitch are planning to make cuts to their workforce as cited by GameBaba Universe on Worker Adjustment and Retraining Notification (WARN) report summary. Discord plans to lay off 160 employees effective February 2, 2024.
Sega of America, on the other hand, plans to lay off 61 employees effective March 8, 2024. Earlier this month, Twitch laid off 35% of its workforce, or around 500 employees. However, according to a new WARN report, the company plans to cut its headcount by 218 persons on April 1, 2024.
WARN Act mandates employers to give their employees 60-day notice before a closure or mass layoff. The advanced notice gives the employee and their families time to find an alternative job, transition or adjust to the potential job loss, and sometimes, time to acquire new skills to compete in the job market successfully.
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Federal and State WARN provisions differ slightly. However, employers are usually mandated to notify their employees 30 to 60 days before a mass layoff or closure. Interestingly, WARN has a Work Sharing Program that encourages and incentivizes employers to avoid layoffs.
“Thinking about layoffs? Instead, apply for the Work Sharing Program. Cut hours and wages while we pay partial unemployment benefits. Keep great employees! Avoid the cost of hiring and training new employees when your business or the economy improves. This program has less impact on your unemployment taxes than a full layoff, and it can positively affect employee morale and loyalty.”
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WARN notices are continually updated and run a full-year cycle that starts from July 1 of one year and ends on June 30 of the following year. The record usually contains columns for the county/parish where the company is located, the date the notice was filed, the date it was processed, the date the notice takes effect, the name of the company, layoff/closure, number of employees impacted, and the company’s address.
Twitch and Discord said the company was rightsizing in the last layoff round
Different factors have been blamed for the ongoing wave of job cuts in the gaming industry. However, most of the sentiment has been around the increased AI adoption in the gaming industry. However, some company executives have blamed it on excessive hiring during the COVID-19 pandemic. During the last round of layoffs, Twitch CEO Dan Clancy said the company was still in the process of rightsizing.
“As you all know, we have worked hard over the last year to run our business as sustainably as possible,” Clancy announced in a blog post. “Unfortunately, we still have work to do to rightsize our company.”
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Discord, another video streaming platform also laid off 17% or 170 employees earlier this month. The next round of layoffs in the company will impact almost the same number as the first. In the last layoff round in the company, Discord CEO Jason Citron said the move was necessary to sharpen the company’s focus.
“We grew quickly and expanded our workforce even faster, increasing by 5x since 2020,” Citron wrote. “As a result, we took on more projects and became less efficient in how we operated.”
While layoffs in the video game industry have raged on in North America and most European countries, Japanese video game makers have remained untouched because of a strong labor law that makes it harder for employers to throw employees out of the door.
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It is unclear if the planned layoff in Sega of America is linked to the company’s plan to “phase out” temporary employers by February. The move was strongly opposed by the Allied Employees Guild Improving Sega (AEGIS-CWA) union when it was first proposed.
Around 10,000 people lost their jobs in the video game industry last year. In contrast to that, over 6,000 jobs have already been cut in January this year. According to the WARN notice, rough days lie ahead for workers in Sega of America, Discord, and Twitch.
