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Not Playing Around: What the Riot Layoffs Mean

As one of the biggest developers in esports, Riot Games is constantly making changes – but no one expected this.

Since its founding in 2006, Riot Games has produced some of the most prolific game franchises in history. League of Legends, VALORANT, Teamfight Tactics, Wild Rift and Legends of Runeterra all have the development powerhouse to thank for their existence. The games and those who created them are beloved by millions of players around the world – which makes Riot Game’s recent revelation that the company plans to lay off more than 11 percent of its workforce all the more shocking.

What did Riot Games announce regarding the layoffs?

On January 22nd, 2024, Riot Games released a memo on its official website titled “An Important Update about Riot's Future.” The memo, written by CEO Dylan Jadeja, details Riot Games’ difficult decision to lay off 530 employees – over 11 percent of its total workforce.

While the move affects the entire company, Jadeja writes that “the biggest impact [is] to teams outside of core development”. He continues to explain that Riot's rapid growth in recent years has left the company “without a sharp enough focus”, and caused the costs of poor investments to skyrocket. The CEO states “This is absolutely the last thing we ever wanted to do. A decision like this has a massive impact on people’s lives and on the culture of Riot. We’re not doing this to appease shareholders or to hit some quarterly earnings number – we’ve made this decision because it’s a necessity. It's what we need to do in order to maintain a long-term focus for players.”

What will happen to the affected employees?

An hour after the memo, Riot Games began announcing layoffs to employees over email. Some received immediate notice, while others were notified that their position was at risk. Riot Games’ CEO stated, “This isn’t the usual way we do things, but we wanted to optimize for letting people know as soon as possible, and that’s tough to do at our scale without using email.” Once notified, employees have the opportunity to meet with their Senior Team Leader within 48 hours to discuss future options. Riot Games aims to comply with necessary employment legislation during this time, which means that meeting timeframes may differ between US and internationally-based divisions.

Riot Games has ensured that all departing employees will receive a minimum of six months severance pay, plus a cash bonus and health benefits until the end of employment. Riot’s Play Fund and Wellness Fund will allocate resources to those in need. As laptops are essential for securing employment, Riot Games is allowing employees to keep peripherals and request a laptop from IT if needed. The company will provide visa support and career counseling to employees, and Rioters will have a grace period with their Riot Games email to send necessary messages. In addition, “Rioters who hold dual-vesting equity, who have satisfied the service-based vesting component at the time of exit, will be able to vest their equity in the event we have a qualifying liquidity event (like a change-in-control transaction) within the next 12 months.”

Riot announced massive layoffs totally 11% of the company.

Riot announced massive layoffs totally 11% of the company.

What does this mean for Riot Games and the esports industry as a whole?

Riot Games’ decision to cut costly investments extends from its layoff decision to its games. While the company states that “we’re as committed as ever to League PC, VALORANT, TFT, Wild Rift, and to exploration in R&D”, they do note in their memo that they are “making adjustments to some of our R&D efforts across games, esports, and entertainment” and “re-thinking the level of support we demand from our enterprise teams.”

Jax splash art Legends of Runeterra

Legends of Runeterra will face serious cutbacks due to diminishing profitability. To ensure the game is sustainable, Riot Games is significantly reducing the size of its development team and placing the remaining effort into its ‘Path of Champions’ PvE mode. Riot Forge, Riot Game’s collaboration with smaller studios, will also end after releasing Bandle Tale.

In the memo, CEO Dylan Jadeja announced a RiotNow event in early February to discuss Riot Games’ plans moving forward and a Riot WW Town Hall on Thursday, January 25th.

In terms of publicity, the decision has caused a significant stir on Twitter, where esports pros and gamers alike have come forward with sympathy for the affected employees. One former Riot Games employee, Kelly Kallahan @RiotBallerina, posted, “got the email. locked out of slack now. I am broken.” Game Changers star SR meL replied, “devastating, im so sorry kelly.” @JoshRTz, head coach of G2’s VALORANT team, commented “Sorry to hear Kelly.”

The decision will affect hundreds of Riot Games employees and their families. There is no going back from such a massive company shift – the coming months will determine how Riot Games’ projects will fare in the wake of pivoting focus. Stay tuned as we await the upcoming RiotNow and learn more as the situation unfolds.