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Tencent’s Riot Games unit said Monday it’s eliminating 11% of its workforce, or about 530 jobs, and scaling back on its division that publishes games from small developers.
“We’re changing some of the bets we’ve made and shifting how we work across the company to create focus and move us toward a more sustainable future,” Riot CEO Dylan Jadeja told employees in a letter published on the company’s blog.
The downsizing follows job cuts across the media and technology world in recent weeks, and continues a trend from last year, when companies went into belt-tightening mode to meet more challenging economic conditions. Amazon and Google are among tech companies that have confirmed layoffs so far in 2024.
Riot, publisher of the League of Legends and Valorant video games, said it will lower headcount for its Legends of Runeterra title released in 2020.
“We’ve been subsidizing the cost of development on LoR through our other games, but at this point, that’s just not a viable option,” wrote Jadeja, who spent six years as Riot’s president before taking over from Nicolo Laurent as CEO in September.
Eric Shen will become Legends of Runeterra’s executive producer, replacing Dave Guskin, accroding to a blog post from Guskin, who said he’ll work on other Riot games.
Riot is also pulling back in its Forge division, which publishes games from indie developers.
“We’re proud of what we’ve done together to bring these stories to life, but it’s time to refocus our efforts on the ambitious projects underway internally at Riot,” Jadeja wrote in the letter.
Tencent, based in China, invested in Riot Games in 2011 and became its outright owner four years later. Riot is headquartered in Los Angeles.
When Microsoft announced its plan to acquire Activision Blizzard in 2022, the software company said the deal would make it the third-largest gaming company in the world, behind Tencent and Sony. Last year Microsoft cut 10,000 employees as it faced slowing revenue growth.
Tencent, which also owns the WeChat app with broad usage in China, has encountered challenges lately. It has seen revenue increase in the single digits or decline for the past seven quarters after a pandemic-era growth spurt. In September, Tencent-backed Epic Games announced it was cutting 16% of its staff. Shares slid 12% in late December after China announced new rules designed to limit excessive gaming.
Pony Ma, Tencent’s co-founder and CEO, told analysts in November that the company is shifting “away from less scalable activities” and boosting investments in artificial intelligence.
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