Another challenging week unfolded in the industry from the very beginning, as Riot Games initiated the layoff of approximately 530 employees on Monday. The company’s CEO, Dylan Jadeja, addressed the situation in a note to employees, highlighting a shift in focus and the need for a more sustainable future.
Riot had expanded its workforce rapidly over the past few years, doubling its headcount, and making significant investments that did not yield the expected returns.
Jadeja admitted that the company’s lack of room for experimentation or failure had put the core of its business at risk.
The decision to lay off employees was deemed a necessity for the company’s long-term focus, rather than an attempt to please shareholders or meet quarterly earnings targets.
Despite the strategic challenges and missteps acknowledged by Jadeja, there was no mention of resignation, salary cuts, or other measures of accountability for the management team.
The article also discussed layoffs in the wider industry, including Microsoft’s announcement of laying off 1,900 video game workers.
The juxtaposition of Microsoft’s financial success, with a net income of $22.3 billion and a market cap surpassing $3 trillion, against the urgency in unloading employees raised questions about the necessity of such cuts.
The Communication Workers of America commented on Microsoft’s layoffs, emphasizing that job security is not guaranteed even in a successful and profitable industry.
The article delved into the importance of unionization in the gaming industry, highlighting the imbalance in the relationship between employers and employees.
The transactional nature of employment, where companies prioritize efficient resource utilization, contrasts with the passionate and dedicated approach often seen in developers.
The author argued that unionization could help level the playing field, allowing developers to negotiate better terms and work towards a more balanced and respectful employment relationship.
In addition to discussing layoffs and industry trends, the article touched upon various topics, including the closure of UK recruiting firm One Player Mission, the growth of the IWGB Game Workers union, and Apple’s changes to comply with the European Union’s Digital Markets Act.
It concluded with insights into the state of the games industry, anticipating closures in 2024 and addressing the impact of tax breaks on job creation.
Overall, the article highlighted the ongoing challenges in the gaming industry, particularly regarding layoffs, management accountability, and the potential benefits of unionization for developers.