Tencent's Riot Games cuts 11% of global workforce

Tencent Holdings' Riot Games has said it will cut 530 jobs which account for about 11% of its global workforce.

Chief executive officer Dylan Jadeja told staff "our costs have grown to the point where they're unsustainable".

Los Angeles-based Riot said teams outside of core development will see the largest impact from layoffs.

The online gaming company says it will focus on its portfolio of live games such as League of Legends, Valorant, Teamfight Tactics, and Wild Rift.

Riot Games is the latest to cut jobs in the gaming industry.

Last year, Amazon and TikTok owner ByteDance both downsized their gaming divisions while Fortnite maker Epic Games, Assassin's Creed developer Ubisoft, and Pokemon Go creator Niantic all announced cuts.

The job losses in the sector are partly due to the mass hiring that happened at the start of the pandemic in 2020.

Riot Games acknowledged that it had "more than doubled in headcount" over the last several years.

When lockdowns ended across the world, sales started to slow. Customers are also holding off on buying expensive titles or stick to fewer games amid high inflation.

That is despite gamers having many highly rated titles to choose from including Baldur's Gate 3, Zelda: Tears of the Kingdom, and Spider-Man 2.

New entries in the Super Mario and Sonic the Hedgehog franchises have also drawn acclaim while there were surprise hits like Sea of Stars, Hi-Fi Rush and Dave the Diver.

But announcing the cut, Mr Jadeja says: "Today, we're a company without a sharp enough focus, and simply put, we have too many things underway".

Riot will stop new game development under Riot Forge and drop some features in Legends of Runeterra which it said has not performed as well as it hoped.

Tencent bought a majority stake in Riot Games in 2011 but it also holds a stake in Epic Games.