In a move that echoes recent trends in the media and technology industry, Riot Games, a unit of Chinese tech giant Tencent, revealed plans to cut approximately 11% of its workforce, amounting to around 530 jobs. The gaming company, known for popular titles like League of Legends and Valorant, is also scaling back its division responsible for publishing games from small developers.
Riot CEO Dylan Jadeja communicated the decision to employees through a letter published on the company’s blog, explaining the need for strategic adjustments to create focus and steer the company towards a more sustainable future. The move comes amidst a broader economic landscape that has seen job cuts across various industries globally.
One notable aspect of the restructuring is the reduction in headcount for Riot’s Legends of Runeterra, a title released in 2020. Jadeja mentioned in the letter that the company had been subsidizing the development costs of Legends of Runeterra through other games, but this approach is no longer deemed viable.
| Title | Impact |
|---|---|
| Legends of Runeterra | Headcount reduction due to unsustainable development costs |
Riot is also scaling back its Forge division, responsible for publishing games from independent developers. Jadeja expressed pride in the achievements of the division but stated that it is time to refocus efforts on internal ambitious projects.
The downsizing at Riot Games is part of a broader trend in the media and technology sector, with notable companies such as Amazon and Google confirming layoffs in 2024. Microsoft, which announced its plan to acquire Activision Blizzard in 2022, has also faced challenges, cutting 10,000 employees last year amid slowing revenue growth.
Tencent, the Chinese conglomerate that owns Riot Games, has faced challenges recently, with stagnant or declining revenue for the past seven quarters. In September, Tencent-backed Epic Games announced job cuts, and in December, Tencent’s shares took a hit following new gaming restrictions introduced by the Chinese government.
Pony Ma, Tencent’s co-founder and CEO, indicated in November that the company is shifting away from less scalable activities and increasing investments in artificial intelligence. This aligns with broader industry trends as companies adapt to evolving economic conditions.
Tencent’s dominance in the global gaming industry is significant, and Riot Games has been a key contributor to its success. However, the recent challenges faced by Tencent, including the downsizing at Riot Games, could potentially impact its standing as the third-largest gaming company in the world.
The restructuring at Riot Games underscores the dynamic nature of the gaming industry and the need for companies to adapt to changing market conditions. As the industry continues to evolve, companies are reassessing strategies to ensure sustainability and growth.
This website uses cookies.
