Tencent's Riot Games announces significant workforce reductions

Riot Games, a subsidiary of Tencent Holdings and renowned for titles like "League of Legends," disclosed its plans to lay off approximately 11 per cent of its global workforce, amounting to 530 employees.

This is based on a Reuters report.

The decision, revealed in a blog post that included a letter from CEO Dylan Jadeja to employees, highlighted the impact on teams outside of core development. The move comes as digital games publishers, grappling with challenges in audience expansion amid high inflation, explore strategies to streamline operations.

Riot's decision follows a trend in the industry, with Electronic Arts Inc. having implemented a 6 per cent staff reduction and downsizing office space in early 2022.

In the letter to employees, Jadeja acknowledged the need for a more focused approach, 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 paying off the way we expected them to. Our costs have grown to the point where they're unsustainable."

The layoffs are seen as a strategic move to enable Riot to concentrate on its core portfolio of live games, including "League of Legends," "Valorant," "Teamfight Tactics," and "Wild Rift".

Riot's decision includes discontinuing new game development under "Riot Forge" and making adjustments in the "Legends of Runeterra" game, affecting both staff and features. The restructuring aims to optimise the company's resources and prioritise its most successful and popular gaming titles.

Tencent, which acquired a majority stake in Riot Games in 2011, maintains a strategic interest in the U.S. gaming market, holding stakes in Riot Games as well as fellow video game developer Epic Games.

(With inputs from Reuters)