Riot Games is laying off approximately 530 people, or about 11% of its total workforce, which the company says is a “necessity” and not “an effort to appease shareholders.”
In a letter to employees published publicly, Riot Games CEO A. Dylan Jadeja explained that the layoffs come because the company has been making “a number of big bets,” “expanding its portfolio” and “growing rapidly” since 2019, with the size of the company will double “in just a few years.”
However, these big bets don’t seem to live up to Riot’s hopes:
Today we are a company that lacks a clear focus and, simply put, has too much on our plate. Some of the significant investments we have made are not paying off as well as we expected. Our expenses had increased to the point where they were unsustainable, and we had left ourselves no room for experimentation and failure, which is vital for a creative company like ours. All of this threatens the core of our business. Over the past few months, we have tried to change our trajectory in a variety of ways. We asked leaders to compromise on what their teams were working on. We have slowed down hiring and, in some cases, even frozen it. We have placed an emphasis on controlling costs while enhancing revenue growth. All this, without a doubt, was not easy for our teams. But after I spoke with the heads of all Riot divisions, it became clear to all of us that these changes were not enough. We must do more to focus our business and focus our efforts on what brings the most value to players – what is truly worth their time. Unfortunately, this involves changes in the area where we invest the most – headcount.
Jadeja went on to outline the layoff plan, which will begin within the next hour and end in the coming weeks, depending on local laws. Riot is offering all laid-off workers six months’ minimum salary, cash bonuses, and a range of additional benefits and support. In addition, the company is asking everyone to cancel meetings over the coming week and work from home if possible while team members deal with the situation.
In addition to the layoffs, following the release of Bandle Tale, Riot Games is also dissolving its Riot Forge label. Riot Forge was announced in December 2019 as an indie publishing label for games from third-party studios using Riot’s IP. Over the years, his credits include Song of Nunu, Ruined King, Hextech Mayhem, and The Mageseeker.
We’re proud of what we’ve built in this space and grateful to the Forge team and our external partners who made these games possible, but we don’t see it as a core part of our strategy going forward.
As for the rest of Riot’s portfolio, the company says League of Legends, Valorant, Teamfight Tactics and Wild Rift will be “more ambitious than ever” and that their teams will be a priority. Legends of Runeterra will continue, but the game is facing “financial problems” and is costing more to develop and support than it generates revenue, so the team is being scaled back and will focus on PvE Path of Champions.
Riot Games’ layoffs are another blow to an industry already suffering from mass layoffs. Last year, an estimated 10,000 people lost their jobs across the industry, and in the first month of 2024 alone that number is rapidly approaching 4,000 amid studio closures, project cancellations and industry funding drying up – a sad trend that looks set to continue until end of the year.
