Moving along with its decision to quit production of its Dreamcast game console, Sega Corp. said Monday it will solicit applications from 300 of its 2,600 employees to leave their jobs.

The application period has been set for between Monday and March 12 and those approved will quit on March 31, the company said. Sega expects the program to save it 1.9 billion yen a year in labor costs, it said.

Of the remaining 2,300 workers, 1,600 will be transferred to new subsidiaries Sega will create by spinning off its in-house software development and game arcade management sections in fiscal 2001, it said.

As a result, the workforce at the parent company will shrink to about 700, it said.

Sega announced in January that it will stop production of its money-losing Dreamcast game console by the end of March and concentrate on game software development and sales.

The company made a sharp downward revision to its earnings forecast for the current fiscal year, due mainly to Dreamcast-related losses. It expects a group net loss of 58.3 billion yen.

Sega released the Dreamcast console in late 1998, but sales stayed sluggish in the face of stiff competition from Sony Computer Entertainment Inc.'s PlayStation2 console.

Sega will incur an extraordinary loss of 1.3 billion yen in the current fiscal year to deal with special retirement allowances for the downsizing program.