Riot Games, a subsidiary of Tencent Holdings, announced on Monday that it plans to reduce its workforce by 530 employees, representing approximately 11 percent of its global staff. This decision was detailed in a blog post that included a letter from CEO Dylan Jadeja addressed to employees.
Based in Los Angeles, Riot Games is best known for its hit titles, including League of Legends. The layoffs are expected to primarily affect teams outside the core development units.
The digital gaming industry is currently facing challenges in growth, as many consumers are holding back on purchasing new, costly games or opting to play a limited selection of titles due to ongoing economic pressures and inflation. Earlier in the previous year, Electronic Arts reduced its workforce by 6 percent and scaled back on office space.
In his letter, Jadeja remarked, “Today, we’re a company without a sharp enough focus, and simply put, we have too many things underway. Some of the significant investments we’ve made aren’t paying off the way we expected them to. Our costs have grown to the point where they’re unsustainable.”
The restructuring is aimed at allowing Riot to concentrate on its successful live service games, including League of Legends, Valorant, Teamfight Tactics, and Wild Rift, according to a separate blog post authored by Jadeja and co-founder Marc Merrill. They emphasized that the company had seen its headcount double in recent years, making it essential to direct efforts towards high-impact projects for long-term viability. “This isn’t to appease shareholders or to hit a quarterly earnings number—it’s a necessity,” the blog stated.
Additionally, Riot will halt new game development under its “Riot Forge” label and will be scaling back on certain staff and features related to Legends of Runeterra.
Tencent, which acquired a controlling interest in Riot Games in 2011, also maintains a stake in Epic Games, another prominent U.S. game developer.
© Thomson Reuters 2024
