Riot Games is laying off roughly 530 people, or about 11% of its global workforce, in a move the company says is "a necessity" and not "to appease shareholders."
In a letter to staff shared publicly, Riot Games CEO A. Dylan Jadeja explained that the layoffs are occurring because since 2019, the company has been making "a number of big bets," "broadening our portfolio," and growing "quickly," with the company size doubling in "just a few years."
However, those big bets do not seem to be paying off in the way Riot hoped:
Today, we’re a company without a sharp enough focus, and simply put, we have too many things underway. 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.
Over the past several months, we’ve tried to alter our trajectory in many different ways. We asked leaders to make tradeoffs in the things their teams are working on. We rolled out hiring slowdowns, and in some cases hiring freezes. We put an emphasis on controlling costs while strengthening our revenue growth. All of which has without a doubt been tough for our teams.
But as I’ve dug in with leaders across Riot, it’s become clear to all of us that these changes aren’t enough. We have to do more to focus our business and center our efforts on the things that drive the most player value – the things that are truly worth players’ time. Unfortunately, this involves making changes in the area where we invest the most — our headcount.
Jadeja goes on to explain the plan for the layoffs rollout, which will begin over the next hour and finalize in the coming weeks depending on local laws. Riot is offering six months of salary minimum to all laid off, cash bonuses, and a number of additional benefits and supports. Additionally, the company is asking everyone to cancel meetings in the coming week and work from home if possible while team members process the situation.
In addition to the layoffs, Riot Games is also axing its Riot Forge label following the release of Bandle Tale. Riot Forge was announced in December of 2019 as an indie publishing label to produce games from third-party studios using Riot IP. In the ensuing years, it's been behind games such as Song of Nunu, Ruined King, Hextech Mayhem, and The Mageseeker. "While we’re proud of what we’ve created in this space, and we’re grateful for the Forge team and for our external partners who made these games happen, we don’t view this as core to our strategy moving forward," Jadeja wrote.
As for the rest of Riot's portfolio, the company says that League of Legends, Valorant, Teamfight Tactics, and Wild Rift will be "more ambitious than ever" and that their teams will be prioritized. Legends of Runeterra will continue, however the game has faced "financial challenges" and costs more to develop and support than it makes, so the team is being downsized and focusing on the PvE Path of Champions.
Riot Games' layoffs come as yet another blow to an industry already reeling from mass layoffs. Last year, an estimated 10,000 individuals lost their jobs industry-wide, and in the first month of 2024 alone so far the number is rapidly approaching 4000 amid studio closures, project cancellations, and industry funding drying up in a tragic trend that seems likely to extend well into the rest of the year.
