Riot Games To Lay Off 11% of Workforce Amidst Strategic Overhaul
Riot Games, a prominent game development company, is set to lay off approximately 11% of its global workforce, totaling about 530 employees. CEO A. Dylan Jadeja clarified in a public letter that these layoffs are considered "a necessity" rather than an attempt to appease shareholders.
The decision to downsize comes as Riot Games grapples with the consequences of extensive growth and ambitious investments since 2019, leading to unsustainable costs and a lack of room for experimentation.
Jadeja highlighted ongoing efforts to redirect the company's trajectory, including tradeoffs, hiring slowdowns, and cost control measures. However, it became evident that more substantial changes were imperative to refocus the business and prioritize endeavors that deliver maximum player value.
The layoff plan will unfold over the next few weeks, adhering to local laws, with Riot Games providing affected employees with a minimum of six months' salary, cash bonuses, and various support benefits. The company has also urged its teams to work from home in the upcoming week to allow for the processing of this situation.
In addition to the workforce reduction, Riot Games has decided to discontinue its Riot Forge label after the release of Bandle Tale, marking an end to the indie publishing label for third-party games using Riot IP.
Riot Games remains committed to enhancing flagship titles like League of Legends, Valorant, Teamfight Tactics, and Wild Rift, ensuring they become "more ambitious than ever." The company also confirmed the continuation of Legends of Runeterra, albeit with downsizing and a strategic focus on the PvE Path of Champions due to financial challenges.
These layoffs contribute to the broader industry trend of workforce reductions, with last year witnessing an estimated 10,000 job losses industry-wide. The ongoing challenges, including studio closures, project cancellations, and dwindling industry funding, suggest a challenging outlook for the gaming industry in 2024.