On Monday, Riot Games, a division of Tencent, announced cuts of 11% of its workforce, about 530 jobs, and a reduction in its division that supports small developers’ game publication.
Riot CEO Dylan Jadeja, in a blog post, informed employees about the changes saying, “We’re transitioning some of our forecasts and modifying our work approach across the organization to move towards a more sustainable future.”
These layoffs are in line with recent job cuts in the media and tech industry, reflecting continued trends from last year when companies started economizing due to the challenging economic climate. Tech giants like Amazon and Google are amidst the companies that have confirmed layoffs in 2024.
The publishers of the acclaimed video games League of Legends and Valorant, Riot, mentioned that it would decrease its headcount for Legends of Runeterra that was launched in 2020. The company had been funding the cost of development for this game through its other titles, which is no longer a feasible option, according to Jadeja.
Dave Guskin will be succeeded by Eric Shen as the executive producer of Legends of Runeterra. Meanwhile, Riot is scaling back its Forge division that collaborates with independent game developers.
The Chinese-based conglomerate, Tencent, which also owns the widely used app WeChat, bought Riot Games in 2011 and later took full ownership in 2015. Riot Games is headquartered in Los Angeles.
Microsoft announced plans to acquire Activision Blizzard in 2022, aiming to become the world’s third-largest gaming company, following Tencent and Sony. Amidst slow revenue growth, Microsoft cut 10,000 employees last year.
Tencent has recently faced challenges, with its revenue rate either increasing by single digits or declining for seven consecutive quarters after experiencing a boost during the pandemic. Shares dropped by 12% in late December due to new rules introduced by China aimed at controlling excessive gaming.
Tencent’s co-founder and CEO, Pony Ma, stated in November that the company is moving away from “less scalable activities” and is increasing investments in artificial intelligence.
