SEGA has announced it will slash jobs and cut titles in an effort to refloat its floundering business.

The news comes after SEGA suggested its investors brace themselves for an “extraordinary loss” over the full financial year, ending yesterday.

A statement to investors announcing the structural reform reads:

“The Consumer Business centred on SEGA CORPORATION is expected to post operating loss in the year ending March 2012, due to the challenging economic climate and significant changes in the home video game software market environment in the U.S. and Europe.

“Given this circumstance, the companies determined that in order to actualize earnings recovery of the Consumer Business in the following period and after and return to a growth path, it is essential to streamline organisations in the field of home video game software in the U.S. and European markets, while shifting to a structure that corresponds to change in environment, including strengthening development in the field of digital content.

The measures to be taken include a “streamlining of organisations” that will result in a “smaller company”, and “cancelling the development of some game software titles.”

Intellectual property not to be affected includes Sonic, Total War, Football Manager and Aliens.