Riot Games, the renowned developer behind popular titles like “League of Legends,” on Monday announced a major restructuring, resulting in the layoff of approximately 11% of its global workforce or about 530 employees. The move signals a strategic shift for the Tencent Holdings-owned gaming giant, aiming to streamline operations and refocus on its core games to ensure “a more sustainable future.”
The layoffs primarily affect teams outside of core game development. The affected employees at Riot Games will get assistance in the form of severance pay, cash bonuses, extended health benefits, and job placement services, among others.
The restructuring will impact Riot’s portfolio, with adjustments to various R&D efforts and a reevaluation of support levels from enterprise teams. Notably, the company plans to scale down its involvement in “Legends of Runeterra” and sunset the Riot Forge initiative, signifying a pivot in its strategy towards more sustainable and core projects. The Los Angeles-headquartered company plans to center its efforts on areas that most directly enhance player experience and value, reinforcing its commitment to its flagship games like “League of Legends” and “VALORANT.”
Announcing the restructuring, Riot Games chief executive officer Dylan Jadeja noted that since 2019, Riot Games has ambitiously expanded, diving into new gaming experiences and broadening its portfolio. This rapid growth, while initially a sign of success, eventually led to an unsustainable operational model with an unclear focus, affecting the company’s core business.
“Some of the significant investments we’ve made aren’t paying off the way we expected them to. Our costs have grown to the point where they’re unsustainable, and we’ve left ourselves with no room for experimentation or failure – which is vital to a creative company like ours. All of this puts the core of our business at risk,” Jadeja said in a blog. The CEO acknowledged the difficult nature of this decision, emphasizing that it was not made to appease shareholders or meet financial targets, but as a necessary step to ensure the company’s long-term focus on player value and creativity.
