Tencent’s Riot Games Lays Off 11% of Staff Globally

In a significant move affecting its global workforce, Riot Games, the developer behind popular video games like “League of Legends” and “Valorant,” is set to lay off approximately 11% of its staff worldwide.

The decision, announced by the Los Angeles-based company on Monday, comes as Riot Games, owned by Chinese tech giant Tencent, cites the need to restructure and focus on key aspects crucial for its future.

In a memo addressed to employees, Riot Games CEO Dylan Jadeja outlined the necessity of eliminating around 530 roles, attributing the decision to escalating costs and strategic investments that did not yield the expected returns.

He emphasized the company’s commitment to prioritizing initiatives that bring the most value to players, acknowledging the difficulty of the decision and describing it as the “last thing we ever wanted to do.”

The move by Riot Games adds to a series of job cuts witnessed in the tech and media industries in the early weeks of 2024. Several major tech companies, including Google and Amazon, have already announced layoffs, with over 5,500 job cuts reported within the first two weeks of the year.

Tencent acquired Riot Games in 2011, and since then, Riot’s flagship title, “League of Legends,” has achieved immense success globally.

However, concerns arose about the company’s reliance on a single game for nearly a decade, prompting calls for diversification. In 2019, Riot Games announced plans to expand its portfolio with new titles, but the recent layoffs indicate challenges in executing this strategy.

Jadeja acknowledged Riot’s aggressive pursuit of growth since 2019, expanding globally and doubling the company’s size. However, he noted that the company had become without a “sharp enough focus” with too many simultaneous projects.

As part of the restructuring, Riot Games will reduce the team behind “Legends of Runeterra,” an online card game, and discontinue “Riot Forge,” a publisher working on new games within the “League of Legends” universe.

Moving forward, Riot Games aims to refocus on its core games, prioritizing key projects and streamlining its operations. Jadeja clarified that this shift is a necessity for the company’s future rather than a response to shareholder pressure or quarterly earnings targets.

The announcement from Riot Games coincides with changes in China’s gaming industry, as the country’s gaming regulator removes draft rules aimed at curbing spending in online video games. Tencent and NetEase shares surged in response to the news, indicating potential revisions in the regulatory landscape.