The tech sector continues to feel the pain of layoffs, with League of Legends and Arcane studio Riot Games set to lay off some 530 employees, representing 11 percent of its employee base. The company informed staff of the cuts Monday afternoon.
The decision to cut staff “isn’t to appease shareholders or to hit a quarterly earnings number—it’s a necessity,” the company said in a statement, adding that it intends to focus on fewer projects, but that have a bigger impact.
“Today, we’re a company without a sharp enough focus, and simply put, we have too many things underway,” Riot Games CEO Dylan Jadeja wrote in a memo to staff. “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.”
Among the changes are the sunsetting of Riot Forge, the division that works with other studios on smaller-scale games, and reducing the size of the team working on Legends of Runeterra “to move the game toward sustainability.”
Riot Games, which operates as a subsidiary of Chinese tech company Tencent, owns a number of popular franchises with an esports following (like League of Legends) and has made a push into entertainment through series of Arcane (on Netflix).
“Our commitment to esports and entertainment in support of our games is also unchanged,” Jadeja wrote in his memo. “The relationships we have with players are a real differentiator for us, so we’ll continue building the experiences in and around our games that have a meaningful impact on what it feels like to be a player.”
The cuts at Riot Games come just a week after Google and YouTube, as well as Amazon, saw significant job cuts. Among Amazon’s cuts were hundreds of jobs at Twitch, the livestream platform popular with esports creators.