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Riot Games Announces Significant Workforce Reduction

2024.01.23

 

Key Takeaways

  • Riot Games reduces its workforce by 11%, impacting around 530 jobs.
  • The company scales back on its Forge division and Legends of Runeterra game.

Riot Games Restructuring

Riot Games, a subsidiary of Tencent, revealed plans to eliminate approximately 11% of its workforce, translating to about 530 jobs. This move is part of the company’s restructuring efforts to focus on sustainable future growth. Riot CEO Dylan Jadeja communicated this strategic decision in a company-wide letter, signaling a shift in Riot’s operational approach amidst a challenging economic climate.

Industry-Wide Layoffs

This downsizing at Riot Games follows a series of job cuts across the tech and media sectors. Major tech giants like Amazon and Google have also initiated layoffs in 2024, reflecting a belt-tightening trend as companies adapt to economic headwinds. Riot Games, known for its popular titles League of Legends and Valorant, specifically mentioned reductions in headcount for its Legends of Runeterra game, citing financial challenges in sustaining its development.

Changes in Leadership and Strategy

The restructuring at Riot Games includes leadership changes, with Eric Shen taking over as the executive producer for Legends of Runeterra, replacing Dave Guskin. Additionally, Riot is scaling back its Forge division, which was focused on publishing games from indie developers. This decision aligns with the company’s refocused strategy on internally driven projects.

Tencent’s Position in the Gaming Industry

Tencent, the China-based parent company of Riot Games, has been a dominant player in the global gaming industry. Tencent became the full owner of Riot Games in 2015 and has since faced various challenges, including regulatory hurdles and revenue fluctuations. The company’s move to streamline Riot Games comes in the context of broader strategic shifts, including a focus on artificial intelligence and scalable projects.

Broader Impact on Tencent’s Portfolio

The cutbacks at Riot Games reflect Tencent’s overall strategy to adapt to changing market conditions. The company, which also owns the widely used WeChat app, has experienced fluctuating revenue growth in recent quarters. These challenges are compounded by new gaming regulations in China and earlier job cuts in other Tencent-backed ventures like Epic Games.

 


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