23rd January 2024 – (Los Angeles) Los Angeles-based online gaming company Riot Games, a subsidiary of Tencent Holdings, announced plans on Monday to lay off approximately 11% of its global workforce, amounting to around 530 employees. CEO Dylan Jadeja addressed the staff in a blog post, acknowledging the need for restructuring and outlining the company’s future direction.
Riot Games, renowned for its popular titles such as “League of Legends,” revealed that the layoffs would primarily impact teams outside of core development. This strategic move comes as digital games publishers face challenges in expanding their audiences due to consumer reluctance to purchase expensive titles and a preference for fewer games amidst rising inflation. Last year, Electronic Arts Inc. also downsized its workforce by 6% and relinquished office space.
Jadeja expressed the company’s need to realign its focus and streamline operations, stating, “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 yielding the expected results. Our costs have reached unsustainable levels.”
In an effort to concentrate on its portfolio of live games, which includes “League of Legends,” “Valorant,” “Teamfight Tactics,” and “Wild Rift,” Riot Games will halt new game development under the “Riot Forge” initiative. Additionally, the company will make adjustments to “Legends of Runeterra,” including staff reductions and feature modifications.
Tencent, the majority stakeholder in Riot Games since 2011, also holds investments in other prominent US video game developer Epic Games. The restructuring measures implemented by Riot Games aim to optimize operations, enhance profitability, and consolidate efforts to deliver exceptional gaming experiences to its loyal player base.