Massive layoffs at Riot Games are just the latest devastating blow to an increasingly fragile games industry. On Monday, the games giant laid off 530 of its employees (that’s 11% of its total workforce), in a shock to employees, players, and the industry as a whole.
So how did this happen at a company that is this massive, with so many projects underway? According to Riot Games CEO Dylan Jadeja in a letter addressed to players, the layoffs are necessary for the company’s “sustainable future.”
According to Jadeja, Riot Games hired more creatives and developers than they could sustain, so the solution they came up with was to fire 11% of their workforce through email, following an internal memo to all staff. Riot Forge, a third-party publishing label focused on working with developers to create more intimate, “bespoke” games under the League of Legends banner, will be shuttered entirely.
The layoffs will include notable designers who worked on champions like Skarner and K’Sante, as well as writers and other creatives.
Many on Twitter took the opportunity to praise Satoru Iwata, the former President of Nintendo, who took a 50% pay cut when Wii U sales slumped in 2014 for five months, along with other executives who had 20–30% pay reductions.
That was not even the first time the late Satoru Iwata took a 50% pay cut instead of laying off his workers. In 2011, he and the board directors of Nintendo volunteered to take a pay cut after the markdown of the Nintendo 3DS.
What’s in Riot’s severance package?
The Riot Games layoffs were abrupt but it feels worth noting that the promised severance package is unusually generous. Given the state of this industry, I guess that could be considered something close to a silver lining.
Riot is offering a minimum severance pay of six months’ salary, with consideration for the employee’s tenure. Additionally, Rioters affected by the layoffs will receive extra compensation to cover their health benefits, equal to the duration of their severance pay. The company’s Wellness Fund is also going to be part of the severance package and is equivalent to $1000.
Employees who have single-vesting restricted stock units (RSU) and other vested stocks with Riot are allowed to keep them. More importantly, these employees are also allowed to participate in future buybacks.
Riot is taking a lot of elements into account, from laptop ownership to job placement to assistance in navigating visa changes—an especially important consideration given Riot’s huge number of international employees.
Games that will be affected
Riot’s downsizing of their workforce will inevitably affect some games. Legends of Runeterra will not stop production, but the Path of Champions gameplay mode will be Riot’s focus of development in the game given its downsized team. Riot Forge, on the other hand, will be discontinued. The company is pivoting its attention to League of Legends, VALORANT, Team Fight Tactics, and Wild Rift. Riot will also be focusing on its entertainment projects like Arcane and K/DA, and linking them to the overarching lore of the characters involved.
(featured image: Riot Games)
