Sega workers become the first major video game company in the nation to get a union contract

Gaming developers at Sega of America appear to have leveled up. This past Tuesday, the union members in the North American section of the company made history when ratifying their contract. It’s one small step for gamers, one giant leap for techkind —as the Sega union became the nation’s first major video game company to get a signed union contract.

Known as the Communications Workers of America (CWA) at SEGA of America, or AEGIS-CWA, the union is comprised of 150 full and temporary workers across a range of titles and departments. It’s all a sign that the current labor movement is quickly gaining speed (not unlike Sega’s famous Sonic the Hedgehog). Along with Sega, video game developer Activision Publishing this month voted to unionize, becoming the biggest video game union in the nation. Owner of Activision, Microsoft, recognized said union and the workers will now begin bargaining a contract. 

“This is a watershed moment for workers in the video game industry,” Jasmin Hernandez, short-form animation production manager and AEGIS-CWA member said in a press release. She added that Sega’s victory proved that a contract that protects workers and improves their conditions “is possible even when management takes an initially hostile stance toward worker organizing.” 

Over the course of decades, the number of organized workers has dwindled until it reached its current all-time low. The most powerful unions still stood strong, as mostly working-class cohorts like the United Auto Workers or Teamsters recently won record-breaking contracts. But amidst a sea of workers’ discontent and the push for higher wages during a volatile economy, unions have gained popularity, and public approval, reaching a peak in 2022 that was the highest it’s been since the 1960s. 

Developers started to want in on the hot action, as the dial turned up in the Bay Area and many workers were subjected to layoffs. Sega employees seeking a slice of union success is representative of the tech world’s larger interest in organizing. Their efforts began amid the hot labor summer, as employees started their bargaining efforts after winning the union election last July. 

The new contract outlines a couple of protections, one being ensured raises. Employees will receive annual raises of at least 4% in 2024, 3% in 2025 and 2.5% in 2026, Bloomberg first announced. Union members also secured retirement benefits, health insurance, and a commitment to hybrid work for at least six more months.

Tech jobs have swung back from their height less than a decade ago, as workers are plagued by fears of becoming obsolete and rounds of layoffs. It’s become so dire that tech (and nonprofit) employees were so unhappy that they drove average employee satisfaction levels to new lows, per a BambooHR report from 2023. One of the provisions that AEGIS-CWA secured was layoff protections, specifically “recall rights for temporary layoffs and severance for permanent layoffs,” according to the press release.

“We’re hopeful that in the midst of extensive layoffs, workers across the video game industry will see organizing as a pathway to improve working conditions for all of us,” Hernandez said. 

Indeed, the unionized YouTube Music workers who recently learned of their contract termination midway through testifying to reach the bargaining table became an example of how tech jobs are not as cushy as they might seem. “There’s the assumption that because we work for YouTube, or we work in tech that we made six figures, had amazing benefits, [and] work fully remote,” Jack Benedict, a former worker whose unionization efforts went viral when he learned of his termination while at the city council podium, told Fortune. But, “people were struggling to make ends meet.” 

And it seems as if tech workers are especially vulnerable to new innovations as CEOs make job cuts in the name of pivoting to implementing AI. Shielding themselves from the invasion of AI in the gaming world, Sega union members have a stipulation in the contract that ensures management provides advanced notice of any planned use of AI in the workplace.” 

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