Riot Games announced on Monday that the studio plans to lay off 530 employees, or about 11% of its global staff. The press release specifically announced the complete shutdown of Riot Forge activities and downsizing of the team working on Legends of Runeterra.
Crisis facing riot games
The year 2023 has proven to be a difficult time in the video game and digital industry. Several major companies, including Epic Games, Electronic Arts, Ubisoft, Twitch and Discord, have experienced mass layoffs affecting thousands of workers in recent months. Only since January 1, 2024, i.e. during these three weeks, 3,800 people have been made redundant (about 9,000 in 2023). Despite the global success of its games like League of Legends and Valorant, Riot Games has not escaped this crisis.
According to industry analyses, the current crisis can be explained by publishers’ difficulties expanding in a market where consumers are reluctant to invest in expensive games or are limited to fewer titles due to high inflation. Layoffs in the video game industry are also attributed to large-scale hiring at the start of the pandemic in 2020. Riot Games has also admitted to significantly increasing its staff in recent years, nearly doubling it. With the end of confinement and the continued rise in raw material prices, consumers have decided to cut back on spending on video games, thus contributing to the current contraction of the sector.
Dylan Jadeja, CEO and founder of Riot Games, announced in a letter that the company plans to lay off about 530 of its employees, representing about 11% of its total staff. In addition to these staff reductions, Riot Games will also scale back some of its projects, including shutting down Riot Forge operations entirely and reducing the team working on Legends of Runeterra. Riot Games has admitted that its card game has not had enough financial success since its launch in 2020. In hopes of making this title more sustainable, the development team will be scaled back and focused on “The Path of Champions” alone, the more popular. Riot Games hopes these changes will focus on “League of Legends”, “Valorant”, “Teamfight Tactics” and “Wild Rift”. For the moment, there is no information regarding the Arcane series (created by the French studio Fortiche Productions) and the MMORPG project.
Today, I’m sharing with you a decision we hoped we’d never have to make at Riot. We’re reversing some of the bets we’ve made and changing the way we work at the company to focus and move toward a more sustainable future. This decision means we will eliminate approximately 530 positions globally, representing approximately 11% of our workforce, with the greatest impact at the team level outside of core development. This also means that we will be saying goodbye to many talented colleagues and friends across all areas of Riot.
Since 2019, we’ve made a number of big bets across the company with the aim of making being a gamer more enjoyable. We jumped in with both feet to create new experiences and expand our portfolio, and we quickly became a multi-game, multi-experience company (…) Today, we are a company that is not focused enough and, to put it So simply put, we have a lot going on. Some of the significant investments we have made are not paying off as we would have hoped. Our costs have risen to the point of sustainability, and we no longer have room for experimentation or failure.
Over the past few months, we have tried to change our course in different ways. We asked managers to compromise on the areas their teams are working on. We have implemented measures to slow and, in some cases, halt recruitment. We are focused on controlling costs while strengthening our revenue growth. All this has undoubtedly been difficult for our teams. But as I met with riot officials, it became clear to all of us that these changes were not enough. Unfortunately, this means changes in the area where we invest the most: our employees.
Those affected by the retrenchment and those not moving to new posts will be offered:
- At least six months’ severance pay
- Cash bonus equal to individual Annual Performance Bonus (APB) target for 2023
- Additional pay to cover health benefits (medical, dental and optical care) equal to the period of severance pay
- Establishment of a special fund ($1000) in the event of planned expenditure by rioters
- Keeping their current peripherals such as a laptop (if required), as well as their headset, mouse and keyboard
- Six months of career support including career coaching and job placement services
- Three months of access to a support program to gain access to counselors who can help them resolve their emotional, legal and financial issues
- Visa assistance for international workers
- Extended access to Riot Games email addresses