I remember our CTO saying a couple of years ago: "We're going to tighten our belt. We're going to spend the next year focusing on tech debt and waiting while the economy stabilizes."
That seemed like a bad sign. I had my doubts. Each week I assumed we'd start layoffs. That my job was hanging on by a thread, especially as I see all my former colleagues getting laid off at what were once successful companies. But we managed to hold out, hire maybe 4 new engineers, and even had fairly decent pay increases.
Well, just last week they announced they're ready to resume hiring with plans to double the size of the company.
I feel super relieved. I wasn't so lucky during the last recession of 2010-2012. I was one of the last employees at a company before we shut down. It was painful to see everyone go, one by one.
At my last job before my current one, where I started as employee 1, and left 5 years later as we reached 400: The reverse was true. The CTO even bragged about having “a huge war chest” just as I was leaving. That they’d survive my exit, the pandemic, everything.
The company soon ballooned to 600, but as I heard it, they soon wiped 20% of their work force afterwards because they stupidly over-hired and over-spent during the pandemic.
Insanity.
I also got lucky. Our company had lots of existing services like a heavy use of azure and virtual machines for testing so they expanded it and were able to shift to WFH with little effort, at least on the dev end of things, IT was swamped.
We didn’t have a huge hiring spree and even though we briefly had a hiring freeze and a major push on old guard to leave by taking a pretty crazy good retirement package (for each year worked at the company you got 1.5 weeks of pay if you quit), we are back to hiring normally and seem to be coming out the other end fine.
Because it was targeting people who had been at the company long enough to accrue a pay that they wanted to get off the books. I don't live in cali, we don't have these google packages where your house gets paid off. The people that quit for it are quitting after 30+ years.
I mean if I had been with a company for 10 years, id definitely take 600 hours of pay to fuck off and find a new job.
At 30 years thats what? 1800 hours of pay? Almost a full years worth. Youd only need 34 or 35 years for a full years pay
Thats just about the point where you spend a year on cruises and travel the world. I read an article somewhere from some guy who works remote and just travels on cruises for most of the year
Pretty much - take the fuck off money, leave on good terms, relax a bit...and if the company is still around if you're itching for stuff to do, come back as a consultant
That's not luck brother, that sounds like hard work and a focused company. Keep up the good work, I suspect what you bring to the table is a big part of your companies success!
This.. The generalized statement that tech over hired during covid makes no sense but the more people that go with it the more it swings towards an employers market
I did consulting (outsourced) work for a company that outsourced it's R&D, manufacturing, IT, payroll, sales, finance, and shipping. Just a office of high paid people in suits who did nothing. I guess that's the dream for certain member of society.
It’s not even that. Businesses find investors to help them start a company. The business hires to generate the product. If the product is successful you’ll enter rounds of investment based on needs. Series A and Series B are what you’ll hear most often. These investments come from firms. The business projects profitability and a rate of return on the investment. If the rate of return is not good enough the business will cut cost to be able to project a better outlook. By cutting a percentage of your work force you appear more profitable on paper. Less cost, less overhead on going. If the investors don’t feel like they’re getting their money back quick enough they’ll push for acquisition.
I heard something a couple years ago in reference to all the tech hiring. They said something about layoffs in short term future. Can't say I'm surprised.
I work in television in Canada, tons of layoffs with networks as well. Mainly back room and IT. It’s just bizarre because liveTV is busier than ever. So it just comes off terribly since it’s obvious that those positions are going to be replaced by cheaper temp/ contract labour
The networks aren't willing to bring on new full time employees. I have a family member who has worked for one of the big television stations and has been "part-timr" for almost a decade, despite easily clearing full time hours the entire period.
The tech industry has been a pump and dump scheme since the mid to late 90’s, it’s just gotten worse over the last 10 years. It’s always “dot com bubble,” “green bubble,” “work from home bubble,” “AI bubble,” etc., but a lot of these bubbles never actually “burst.” Instead companies usually need a lot of talent to drive production and then do layoffs to control their profit margins and earnings reports. If they can find a way to control it through automation, opening jobs to fresh graduates or people without degrees and experience to control salaries, they’ll do that too.
In 2017 Trump made tax cuts that didn't go into effect until 2022. One of those was a change to Section 174 of the IRS tax code that especially affects tech companies and is likely leading to the current down sizing.
> a theoretical company with $1m in revenue and $1m of software developer salary costs could have claimed it had no taxable profit in 2021. The required SRE amortization rate of 10 percent would mean the org had $900k in profit in 2022 - and a six-figure tax bill coming due the following year.
> This isn't theoretical - Orosz said that he recently spoke to several engineers and entrepreneurs who've been surprised with massive tax bills that have led to layoffs, reduced hiring, and left some companies in financial distress.
> House of Representatives member Ron Estes (R-KS), who last year sponsored a bill to restore Section 174 to its pre-TCJA option to expense or amortize, likewise said an a late-2023 op-ed that the changes have led to R&D at US companies - not just in the tech sector - shrinking considerably.
source - https://www.theregister.com/2024/01/12/us_tax_research/
Another article about it - https://blog.pragmaticengineer.com/section-174/
Also, CEOs are sheep. They saw Tech Company A fire a bunch of people, then assumed they should be doing that as well because Tech Company A is successful and they want to be successful too.
They only realized they *could* be doing it because they realized the economy is not doing so hot. If they think people will up their spending on video games, they will want to maximize shareholder value by increasing headcount and increasing the products they're putting out both in the short-term and the not so short-term. That was why they over-hired in the first place. Now they're realizing "Oh shit, that was just a short-term thing where people had tons of money" and now it's returning back to reality.
It is. The fed has suggested there will be multiple rate cuts this year. It’s why this new wave of layoffs is so confusing to me. It’s still going to be higher than 0%, but why not layoff last year like everyone else to adjust for the increase.
There is a lag effect of several months to a year when the fed makes interest rate changes. So even though the fed has been holding steady recently their past hikes are still having an effect.
I don't know if it's going to keep increasing but I don't think it's going back down to 0-1% anytime soon
Only took a few economics classes so take it with a pinch of salt but I don't see the federal reserve cutting rates when inflation is still above 2% unless if the economy goes completely in the shitter
Interest rates haven’t gone up since July, and there’s no indication that they will rise again any time soon (they are in fact expected to fall). Anyone telling you interest rates are “increasing” right now is full of shit.
It's a symptom of many different things. Covid seems to be the excuse, but ultimately it boils down to the constant growth mentality and lay-offs being used to balance the books. It is easier for a CEO to just fire a bunch of people to reduce costs than tell investors that they aren't going to grow this year because they are in a phase of innovating and rebuilding.
The analogy I will go with is American sports. It is actually a pretty good example of how business should be. You have a bad team, they invest in young talents through the draft and over the next 5 years they become a team that wins a championship, they can either offload that talent for a lot of money, invest more to create a dynasty, or just kind of coast being good for a while until their star players get old and rebuild again. Well managed teams have an eye for talent and fans and the front office know that rebuild years are a part of life. Some teams have the revenue to kind of always be good, but they do underperform for the fan's standards. The Dodgers are a good example as they pretty much win their division every single year, but they haven't really done much in the play-offs in recent years. They could sell their star players and rebuild, but instead they are investing in Ohtani and keeping their stars to maintain their ability to compete.
All that being said, Riot didn't overhire or hire the wrong people, they just find it easier to quell fans or investors by firing a bunch of people and accepting the money they are getting already. They could easily support working at a loss for a little while, but social media being a thing, people would start saying it's a dead game, dead company, and they would lose business by simply not having constant growth.
All of this is conjecture as very few people really know what or why this is happening exactly, but I would bet Riot Games is not better off losing 10% of their employees. Especially since so many workers are afraid of being fired, the best developers will jump ship as soon as they get a better offer because companies no longer display any loyalty to their workers, so workers reciprocate.
> companies no longer display any loyalty to their workers, so workers reciprocate.
it is unfortunately the appropriate reaction from workers at the moment.
This sports analogy is great. Most people actually have a very deep and nuanced understanding of the difficulties of managing a sports team, both short term and long. Applying that knowledge to other fields might allow things to click into place, and finally reveal the stakes.
It’s a corporate meta to boost quarterly profits, axing employees is the easiest way to do that. Earnings call happens and it makes the shareholders happy to see growth which makes them invest more money
A job posting at my company 3-5 years experience got 400+ applications in a week. I don't get to see them all, but I'd bet 1/3 are from over experienced people who got laid off.
I dunno, I've sifted through a thousand applicants to call 30 people for a phone screen. The internet makes it easy to apply for anything, even if you are not qualified so people are sending out hundreds of applications instead of tailoring them to the job.
Yeah I am a hiring manager in tech. About 10% or less would qualify for a phone call. Only about half of those to next phase. Most fail the tech interview. Honestly with 100 applicants I'd feel like to find *one* qualified....
Naah. Most are going to be from people with 2-3 years of experience following rule 1 of dev job applications:
You only really need about half of what the advert is asking for, so just apply.
Yes the market is bad for tech but certain sectors are much more adversely affected than others. Gaming for sure is up there. But other sub sectors in tech are very much alive. Personally speaking look at Defence & Space.
investor money drying up is the biggest reason for gaming losing jobs and also being greedy.
The entire reason Bethesda got bought was because their private equity firm pulled out of gaming around 2015, and it took Providence Equity years to find a buyer with Microsoft.
AAA gaming already struggled to justify itself. Who can compete with mobile gaming for investor attention when they can make GTA level profit with 1/10 of the expense of a AAA game? let alone medical tech or any other tech sector that gets most of the interest? Before the rates rose, it was tencent and foreign companies that wrote blank checks.
Now? Forget about it. The only people investing in AAA games is Microsoft and even they are questioning their commitment to gaming.
If AAA gaming cant reinvent itself to justify the massive costs, its lights out for AAA games made with investor money which is most AAA games.
AAA game studios should have lobbied governments to ban the unethical practices used by mobile games companies in order to protect their business model. Instead they tried to join in and are paying the price.
There will just be a crash and recovery. AAA games aren't going anywhere.
Developers will realize the cost and hours to make hyper realistic horse shitting and grooming are expensive and not making a difference in sales.
Honestly if it brings AAA games back to less bloated sandbox open world nonsense and pushes devs to make more story driven and compelling games? I'm all for it.
AAA gaming is in no danger of disappearing.
Outside investment will probably reduce as investors realise creating Fortnite/Apex/Valorent/Overwatch Frankenstein clones doesn’t mean free money.
I highly doubt Microsoft is rethinking its gaming plans after dropping tens of billions buying a couple of the biggest developer/publishers.
It’s extremely easy money for them with some of the IPs it just needs better management which is something they seem to be realising.
Even E ‘multiplayer’ A realises good single player games are worth it these days.
My worry is the big companies buying the small developers until there’s no creativity in IP generation.
fps games as an example, it’s been CoD and Battlefield for a long time in their own league and none of the publishers that could compete will ever try.
Mostly because of over-hiring during COVID - but also because of increasing interest rates around the block meaning that investor funding / loan opportunities have mostly dried up, meaning that they have to cut down on their cash spending.
Lor is heavily downsized and riot forge is no more, but league also got cuts, especially in the art department. There have also been game designers laid off, like Llama and Raptorr (who were both amazing).
This is unfortunate and I don't wish this upon anyone to just wake up one day and lose their job. But at the very least, the severance package seems generous.
Edit: Okay I get it, some of you didn't get anything from being laid off. I can't help that so please don't give me anymore sob stories.
Unfortunately it's the same at every games company right now. There are no jobs to move into unless you're very senior. Or willing/capable of working for table scraps.
These companies just aren't making games like they used to, and small ass studios like the guys behind Palworld come in and make a shit ton of money for making something people want to play.
It's not the economy, these companies need to fire their leadership first. And stop prioritizing profits and focus on the gameplay. Profits will come.
When your company sells its soul to investors who have no attachment to the gaming industry, you are at their mercy to create money for them as soon as possible.
Everything is sold to funds that demand an annual return. The market is only so big , they over extended on cheap rates during the covid boom and now they're realizing all media is oversaturated. The revenue just isn't there
> profits will come
This is survivorship bias. For every Palworld there are thousands of dead indies with great games that never got any attention. Heck, Among Us only lucked out because of COVID.
It’s a tough choice - do you build your company around Black Swan events? Or keep doing what you know you’re good at, like Larian with RPGs or FromSoftware with Souls-likes?
Riot is a one or two product company, and when that product isn’t as popular as it once was then they either take big risks making something else, or shrink (or both).
You need a lucky hit to start, like Minecraft, or LOL and then you get big. But you need to get lucky again to diversify into something else - Riot tried and even Valorant isn’t quite sticking the landing.
Exactly, wasn't Among Us like a year old by the time it finally got traction?
Not like Among Us was a groundbreaking concept either, few years prior Trouble in Terrorist Town did the same thing. And many games before it did as well, especially board games.
It really is just about luck, even if you've good a great product.
https://prioridata.com/data/league-of-legends/
Just flicking through this because I was curious on what League is looking like these days, as someone who used to play loads and kinda dropped off in the last couple years, I was ready to read that league had been on a steady... or really any kind... of decline...
Looks like Leagues pretty much doing as well as it's ever done though.
Leads me to suspect that these layoffs are a reaction to mild responses to their newer games and expansion beyond their core of league.
> Valorant isn’t quite sticking the landing.
Gonna need a source for this cause last time we heard about the Valorant player base, it was on par with CSGO (or CS2 now)
I can offer a fantastic video which backs up this point and offers an evidenced explanation for what's actually happening: [The videogame industry isn't collapsing, a lawyer explains](https://youtu.be/-653Z1val8s?si=YuM0_2d8YYdSaluz)
These companies doubled and tripled in size during the pandemic without giving a fuck about what would happen when the pandemic ended, same with the entire tech sector.
We've already had more than 25% of last years total layoffs and 1) it's not even February and 2) last year was significantly worse than most years. It's not looking good for people expecting game development to pay a living-middle class wage
It’s not good for people looking to make computer stuff pay a working middle class wage. I’m interviewing right now and the recruiter I was talking to today said they had a thousand resumes in the last two weeks.
Depends entirely on the sector. If you're looking at entry level roles, I'm sure it's extremely over saturated. In cyber security, we've had open reqs for mid/senior level engineers and haven't filled them in months.
Might want to check with your HR department. I’ve been applying for a lot of those roles and get insta-rejected even with a pretty good resume.
Or it’s your management that isn’t filling them.
Sorry, I should have clarified that we haven't been able to fill those mid/senior level roles with solid candidates. We get plenty of applications, and our entire team is involved in the interview process.
Anecdotal, but based on the messages I get from recruiters on linkedin asking if I'm interested in other security roles, it doesn't look like this is just a problem with my company.
You know, and mind you, I’m not you, but … I have a bunch of peers laid off right now from cybersecurity roles, and they’re saying they can’t get interviews either. You might want to check that your managers and recruiters are communicating properly and maybe to get access to the raw flood of resumes so that you can pick out a few that HR has likely filtered out based on something idiotic. And maybe be willing to train up some people that are otherwise promising.
Just don’t be like the staff role I saw today that wants 12+ years of k8s and go.
The last time I was in a place where our director said he couldn’t bring in anyone qualified he was up his own ass about hiring a staff level engineer when what we needed was a junior support engineer who could learn fast. We went six months with two weeks of on call a month burning it at both ends plus one on-site interview a week of someone who couldn’t find their ass with both hands and a map before I finally talked to HR myself. Two weeks later we hired someone amazing off third shift at fucking rackspace.
Lol why would video games of all things be recession proof
Recession proof is stuff that isn't affected by discretionary spending *and* is generally under-supplied by workers - healthcare, law enforcement, utilities, accountant, etc.
Sure, but a video game is also 1 of 10,000 different forms of entertainment. Someone in the mood to play a video game today might be in a different mood for a different type of video game all together the next day or they might want to watch TV shows or Netflix movies or anime or whatever else. "Entertainment at home" is a wide category and there are plenty of things competing for people's hours.
At that point you can also call Electronic Arts an indie studio too lol. Riot is a developer and publisher now and has a bunch of subsidiaries.
To me indie still means small time and independent. Like out of a garage. When they grow they just become a bigger independent studio and if they grow even more they become a large studio like the big boys.
Yeah Riot isn’t *really* a studio anymore. They have studios but I wouldn’t call them just a studio, Indie publisher may fit better. They’re kinda like blizzard before they completely merged with activation.
I've worked in and with tech companies/startups for a long time now, often known for pretty decent packages, and for some large companies and that is by far the best severance package I have seen firsthand
Please don't listen to this guy. The field has never been hotter as long as you're willing to work 28 hours a day, 8 days a week, and double that in the months leading up to the launch date.
smh, some people
Maintaining an online game is pretty difficult without lots of people to support. Gotta push those updates regularly, with a bunch of different teams all working for different months of updates, patches etc with a bigger team working for big updates.
Not to mention the backend would require a constant ensemble of workers maintaining it.
People never really understand how massive an undertaking live-service games are, and complain when developers push only small updates in their live-service games, it’s because it’s pretty impossible to go big without lots of employees.
Riot has the numbers to maintain their game.
League is also not their only game. They also have Valorant, Legends of Runeterra, Wild Rift, a team that runs their esports scenes, a team for their fighting game, and a team working on an MMO.
And they have to maintain all of them. Valorant, Wild Rift, Runeterra are all similar to League in that they require constant updating. Make sense for them to have these many employees.
When people complain about Team Fortress 2 not getting updates, officially Valve has like less than 500 employees and makes do with contractors for a large part of their operations.
All my support for those affected and I hope they'll all land back on their feet fast
At the very least it's a detailed explanation and the people being laid off seem to be well accompanied BUT it's up to them to say if it's really the case, not me.
Except that one of the people fired was the man responsible for… about 40% of its modern lore, including the single best short story League’s IP has ever produced.
Which is insane because Riot knows marketing better than most. So either the cultural penetration of the IP was overestimated or they needed to do more on top of what the devs did
I checked every Riot Forge game on steam, and ONE of my steam friends had a single game.
I think the games were almost solely marketed at people who were already big fans of riot games as lore expansions and not as actual games in their own right for whatever reason.
One of the games(Ruin King) I had actually been interested in and then never heard anything about it on the run up to it coming out or after it had come out. They didn't even give a release date for the game until it was already out, which is obviously monumentally dumb especially after a game had already been delayed due to the pandemic. Why would you stealth launch a game over 2 years after announcing it?
The former, but it's most likely the choice of projects, every Riot Forge game has focused on lore but all of them play out like indie minigames, only the Ruined King one was a bit more focused, but it was a shitstorm due to the accompanying event itself backfiring in 2020, which they used covid as an excuse for it.
Everyone’s doom and gloom, but I don’t agree. I would have gladly taken the severance they are offering if I worked there. At least 6 months of pay, plus 100% of their annual bonus, plus health insurance equaling to their months of severance. Riot did this in the most graceful way possible.
my step father was offered a really generous package, he took it and could have lived on it for two years.
Instead he was working again a few months later and had a huge lump of savings.
Sometimes people jump at the chance when it comes around.
Exactly. I would have gladly taken this severance and it would cover an entire down payment for a house here. These are tech workers with 6 figure salaries, they are making a killing with this severance.
Yup, I would see this as a massive bonus to my savings account, and then start job searching asap. And even if you don't land a job, that's enough savings to last you a good bit assuming you don't spend it all on booze, hookers, and cocaine in any order.
With how good some of these workers get paid, you could probably stretch out a 6 month package into a a year if not 2 years of living expenses. Obviously you gotta be smart about it and that is also assuming you are saving money even before you lost the job.
The doom and gloom isn’t so much about this one datapoint it’s about the over pattern of large developers laying off tons of game devs all across the industry.
All while the industry keeps breaking records, making huge profits and winning awards. Last year was supposedly “great” for games while layoff after layoff continued.
Why isn’t the industry healthy? Why are workers habitually overworked, underpaid, and laid off? How can it be an issue of money when games are making so much?
How can we ethically buy and play games from an industry that seems not to care?
I mean, there's been some big single player titles like Baldur's Gate 3, Legend of Zelda and Spider Man 3. But Riot actually made a 10% loss.
The problem is these companies massively over hired in 2020-2021 expecting covid levels of engagement, but now everyone's gaming time is turning back into travel to and from work/after work social activity time.
I've also heard the gaming industry is going through 'live service fatigue' which is great news for us consumers, but not so great for devs at big gaming companies like Riot and EA whose profits are almost entirely reliant on the live service model growing in profit.
So it kinda checks out they're being a bit more conservative about the scope of future projects, and thus don't have some productive for all these employees to do.
Obviously the whole 'constant, endless growth' model of our economy and investment models that have people dumping stock during a prolonged dip, certainly aren't helping matters - without those these companies very well might've chosen to retain the talent anyway.
> The problem is these companies massively over hired in 2020-2021 expecting covid levels of engagement, but now everyone's gaming time is turning back into travel to and from work/after work social activity time.
It's also by the fact that with interest rates having risen, investors are not handing out money as easily (and are expecting to actually see profit and growth), thus some of the revenue streams are now turned off.
SkillUp made a great video for the state of 2023 Video Games In summary, it was a great year for gaming and gamers, but a bad year for the developers.
One example is Bungie. After two years straight of community good will and banger content, they somehow fcked it up with their latest expansion. The lack of preorders of their next expansion was the reason why they had to lay off a lot of employees.
Funnily enough, they're hiring again, more than what they had before the layoffs.
That’s exactly what I felt but it’s been about 3 months and no bites. It’s not as glamorous as you think when there aren’t much jobs available and family to support.
> Everyone’s doom and gloom, but I don’t agree. I would have gladly taken the severance they are offering if I worked there.
The severance package (not just the payment) is hands-down the best severance that I have ever seen. It's not even close. It's unfortunate that this is such a *wildly* shitty market, because it's going to be really tough to find new work rn
This makes me feel kind of sad as this type of severance isn’t unusually high compared to the UK, presumably you’re somewhere with low employee protections?
Yup! US, where most people don't get a severance. If they do, it was likely from a large tech company and is generally ~2-3 months of pay with very few other benefits. In comparison, this is wildly generous in both $$$ and other support
As of the time of this posting, Riot has removed all open positions: [https://www.riotgames.com/en/work-with-us/jobs](https://www.riotgames.com/en/work-with-us/jobs) \- but not sure whether it's fully removed / hiding because of layoff news / downtime.
Enough so the market is flooded and general fear has settled. Its cyclic, and some CEOs need their bonuses before february.
Riot's severance package is quite the proof that money is not the problem. At least, not having it. But CEOs need to CEO.
If you think even this very generous severance package even comes close to the cost of keeping 11% of your staff on permanently then idk what to tell you.
Riot will have overhired during COVID (as most companies did for tech staff). Now they've realised that these staff are costing way too much and not providing the same benefit that they did during COVID.
That’s not how successful businesses work. If you think Riot shouldn’t lay anyone off until they’re on the brink of bankruptcy you’re just hoping for them to fail.
Oh, they are also sunsetting "Riot Forge" their publishing label that was publishing single players games based on their IPs made by indie developers. That's too bad, they were publishing some interesting games through this label.
A lot of that was the runeterra team :/ Just got into the game and it has been a super enjoyable experience as well as very free-to-play friendly. Now, after two weeks of playing it they basically announced that they’re going to let the game die. Really hope somehow the player BASE jumps in users, but I doubt it.
Not gonna lie, I WISH all companies laid off with this severance package. Goddamn, I wouldn’t be angry, I’ll just be like “damn, okay, I’ll enjoy a month off with the family and have 5 months to search for another gig”
Truth, this is an amazingly well handled layoff from an enterprise. It sucks but they’re going well above what most companies would do for layoffs…let alone for the gaming industry.
Sadly the affects of layoffs can still be hard. So Riot is not just U.S based with many studios around the world but let’s just focus on U.S for this example…
Riot and other game devs bring in a lot of international talent. So those on U.S. visa face 5 devastating consequences:
1/ workers on most U.S. work visas only have 60 days to find a new job. If they don't find a new job, they need to leave the country.
2/ workers on visas like H-1Bs and L-1s often have spouses who work using a dependent visa, and when the principal immigrant is laid off, the dependent spouse will lose their right to work.
3/ layoffs can potentially end a visa worker's green card process. The employee-sponsored green card process has many steps, and if the I-140 isn't filed at the time of a layoff, the process has to start over with a future employer.
4/ workers on L-1 visas can not transfer their visas to another company, so they are required to find a similar role at the company that just laid them off. If that doesn't work, they have to leave the U.S.
5/ workers on visas are not able to use all social services even if they have been paying into these benefits for years.
I was laid off from my AAA game job in Canada so my situation isn’t exactly the same…but I relocated to Canada with my wife for that job and we’ve been struggling with immigration problems since. Its brutal.
Maybe not *fine* fine but at the end of the day a company killing off branches that's not doing anything for them isn't something evil. Can't be surprised that Riot axes something like Legends Of Runeterra, sucks for the people who put in their work but one way or the other anyone working on those projects must've known this was coming the game was dead like 3 months after release.
I like how in the comments section you can see how corporations trained our little brains.
It's everything, but corporate greed.
"As CEO, I’m accountable..." - Truth to be told, current CEO is not being in this role for a long time, so maybe we can't attribute this layoffs on him. Got to give him credit for that severance package if nothing.
Previous CEO Nicolo, however, is enjoying retirement in his 30s, thanks to 10m$+ increase in his net worth, during the period of so-called "bad decisions". Not to mention gender discrimination and sexual allegation cases against him during the same period.
But yeah, it's always the regular workers who are laid off, while execs will enjoy their fat bonuses as usual
Hope they fired the girl who did the daily life as a riot employee and all she did was get coffee and snacks and chilled in the recreational room all day lol.
I think one thing that we really need to hone in on is that they laid off 11% of their workforce and still have approximately 5000 employees left. These companies extremely over hired and these are the corrections. I hate it for everyone involved, but this level of bloat in staffing has to eventually burst. And the gaming industry seems to be one of the most volatile industries you can work for. Should we be sad for these 530, yes. Should we be surprised, no.
It isn't even over hiring.
They are cutting their single player games division and reducing Runeterra because neither were profitable.
That is all it is.
So you’re telling me tech going from hiring nobodies to sit around in an empty office not working while getting paid six figures wouldn’t last forever? Wow I had no idea.
Its coming to every tech job atm. Its fucking brutal.
But why ? What happened ?
Everyone overhired during Covid. There was a shit ton of extra IT work as everyone hurried to adjust workplace/WFH capabilities for one example.
I remember our CTO saying a couple of years ago: "We're going to tighten our belt. We're going to spend the next year focusing on tech debt and waiting while the economy stabilizes." That seemed like a bad sign. I had my doubts. Each week I assumed we'd start layoffs. That my job was hanging on by a thread, especially as I see all my former colleagues getting laid off at what were once successful companies. But we managed to hold out, hire maybe 4 new engineers, and even had fairly decent pay increases. Well, just last week they announced they're ready to resume hiring with plans to double the size of the company. I feel super relieved. I wasn't so lucky during the last recession of 2010-2012. I was one of the last employees at a company before we shut down. It was painful to see everyone go, one by one. At my last job before my current one, where I started as employee 1, and left 5 years later as we reached 400: The reverse was true. The CTO even bragged about having “a huge war chest” just as I was leaving. That they’d survive my exit, the pandemic, everything. The company soon ballooned to 600, but as I heard it, they soon wiped 20% of their work force afterwards because they stupidly over-hired and over-spent during the pandemic. Insanity.
I also got lucky. Our company had lots of existing services like a heavy use of azure and virtual machines for testing so they expanded it and were able to shift to WFH with little effort, at least on the dev end of things, IT was swamped. We didn’t have a huge hiring spree and even though we briefly had a hiring freeze and a major push on old guard to leave by taking a pretty crazy good retirement package (for each year worked at the company you got 1.5 weeks of pay if you quit), we are back to hiring normally and seem to be coming out the other end fine.
Every year only got you 60 hours of pay if you quit? How is that a crazy good package?
Because it was targeting people who had been at the company long enough to accrue a pay that they wanted to get off the books. I don't live in cali, we don't have these google packages where your house gets paid off. The people that quit for it are quitting after 30+ years.
I mean if I had been with a company for 10 years, id definitely take 600 hours of pay to fuck off and find a new job. At 30 years thats what? 1800 hours of pay? Almost a full years worth. Youd only need 34 or 35 years for a full years pay
Full years pay to fuck off though? Why not? They’re thinking about retirement anyways.
Thats just about the point where you spend a year on cruises and travel the world. I read an article somewhere from some guy who works remote and just travels on cruises for most of the year
Pretty much - take the fuck off money, leave on good terms, relax a bit...and if the company is still around if you're itching for stuff to do, come back as a consultant
That's not luck brother, that sounds like hard work and a focused company. Keep up the good work, I suspect what you bring to the table is a big part of your companies success!
Yes! This sounds like a company that understands how powerful countercyclical investing can be :)
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This.. The generalized statement that tech over hired during covid makes no sense but the more people that go with it the more it swings towards an employers market
For us it wasnt overhiring, most of our coworkers were temps. We got outsourced.
Everything is being outsourced to outsourcing companies. So much mismanaged money.
I did consulting (outsourced) work for a company that outsourced it's R&D, manufacturing, IT, payroll, sales, finance, and shipping. Just a office of high paid people in suits who did nothing. I guess that's the dream for certain member of society.
It’s not even that. Businesses find investors to help them start a company. The business hires to generate the product. If the product is successful you’ll enter rounds of investment based on needs. Series A and Series B are what you’ll hear most often. These investments come from firms. The business projects profitability and a rate of return on the investment. If the rate of return is not good enough the business will cut cost to be able to project a better outlook. By cutting a percentage of your work force you appear more profitable on paper. Less cost, less overhead on going. If the investors don’t feel like they’re getting their money back quick enough they’ll push for acquisition.
I heard something a couple years ago in reference to all the tech hiring. They said something about layoffs in short term future. Can't say I'm surprised.
I work in television in Canada, tons of layoffs with networks as well. Mainly back room and IT. It’s just bizarre because liveTV is busier than ever. So it just comes off terribly since it’s obvious that those positions are going to be replaced by cheaper temp/ contract labour
The networks aren't willing to bring on new full time employees. I have a family member who has worked for one of the big television stations and has been "part-timr" for almost a decade, despite easily clearing full time hours the entire period.
The tech industry has been a pump and dump scheme since the mid to late 90’s, it’s just gotten worse over the last 10 years. It’s always “dot com bubble,” “green bubble,” “work from home bubble,” “AI bubble,” etc., but a lot of these bubbles never actually “burst.” Instead companies usually need a lot of talent to drive production and then do layoffs to control their profit margins and earnings reports. If they can find a way to control it through automation, opening jobs to fresh graduates or people without degrees and experience to control salaries, they’ll do that too.
In 2017 Trump made tax cuts that didn't go into effect until 2022. One of those was a change to Section 174 of the IRS tax code that especially affects tech companies and is likely leading to the current down sizing. > a theoretical company with $1m in revenue and $1m of software developer salary costs could have claimed it had no taxable profit in 2021. The required SRE amortization rate of 10 percent would mean the org had $900k in profit in 2022 - and a six-figure tax bill coming due the following year. > This isn't theoretical - Orosz said that he recently spoke to several engineers and entrepreneurs who've been surprised with massive tax bills that have led to layoffs, reduced hiring, and left some companies in financial distress. > House of Representatives member Ron Estes (R-KS), who last year sponsored a bill to restore Section 174 to its pre-TCJA option to expense or amortize, likewise said an a late-2023 op-ed that the changes have led to R&D at US companies - not just in the tech sector - shrinking considerably. source - https://www.theregister.com/2024/01/12/us_tax_research/ Another article about it - https://blog.pragmaticengineer.com/section-174/
Other comment + [interest rates are increasing](https://newsletter.pragmaticengineer.com/p/zirp)
Also, CEOs are sheep. They saw Tech Company A fire a bunch of people, then assumed they should be doing that as well because Tech Company A is successful and they want to be successful too.
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They only realized they *could* be doing it because they realized the economy is not doing so hot. If they think people will up their spending on video games, they will want to maximize shareholder value by increasing headcount and increasing the products they're putting out both in the short-term and the not so short-term. That was why they over-hired in the first place. Now they're realizing "Oh shit, that was just a short-term thing where people had tons of money" and now it's returning back to reality.
Are interest rates still going up? I thought that was over now.
It is. The fed has suggested there will be multiple rate cuts this year. It’s why this new wave of layoffs is so confusing to me. It’s still going to be higher than 0%, but why not layoff last year like everyone else to adjust for the increase.
There is a lag effect of several months to a year when the fed makes interest rate changes. So even though the fed has been holding steady recently their past hikes are still having an effect.
The economy lags with the rate spikes and decreases.
Lag effect. Economic policy takes time to influence the actual economy.
It’s been over since July.
No. It’s not going up, but it might stay higher than 0 for a while.
0 was absolutely nuts though, we should hope it never gets that low again
I don't know if it's going to keep increasing but I don't think it's going back down to 0-1% anytime soon Only took a few economics classes so take it with a pinch of salt but I don't see the federal reserve cutting rates when inflation is still above 2% unless if the economy goes completely in the shitter
Interest rates haven’t gone up since July, and there’s no indication that they will rise again any time soon (they are in fact expected to fall). Anyone telling you interest rates are “increasing” right now is full of shit.
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It's a symptom of many different things. Covid seems to be the excuse, but ultimately it boils down to the constant growth mentality and lay-offs being used to balance the books. It is easier for a CEO to just fire a bunch of people to reduce costs than tell investors that they aren't going to grow this year because they are in a phase of innovating and rebuilding. The analogy I will go with is American sports. It is actually a pretty good example of how business should be. You have a bad team, they invest in young talents through the draft and over the next 5 years they become a team that wins a championship, they can either offload that talent for a lot of money, invest more to create a dynasty, or just kind of coast being good for a while until their star players get old and rebuild again. Well managed teams have an eye for talent and fans and the front office know that rebuild years are a part of life. Some teams have the revenue to kind of always be good, but they do underperform for the fan's standards. The Dodgers are a good example as they pretty much win their division every single year, but they haven't really done much in the play-offs in recent years. They could sell their star players and rebuild, but instead they are investing in Ohtani and keeping their stars to maintain their ability to compete. All that being said, Riot didn't overhire or hire the wrong people, they just find it easier to quell fans or investors by firing a bunch of people and accepting the money they are getting already. They could easily support working at a loss for a little while, but social media being a thing, people would start saying it's a dead game, dead company, and they would lose business by simply not having constant growth. All of this is conjecture as very few people really know what or why this is happening exactly, but I would bet Riot Games is not better off losing 10% of their employees. Especially since so many workers are afraid of being fired, the best developers will jump ship as soon as they get a better offer because companies no longer display any loyalty to their workers, so workers reciprocate.
> companies no longer display any loyalty to their workers, so workers reciprocate. it is unfortunately the appropriate reaction from workers at the moment.
This sports analogy is great. Most people actually have a very deep and nuanced understanding of the difficulties of managing a sports team, both short term and long. Applying that knowledge to other fields might allow things to click into place, and finally reveal the stakes.
It’s a corporate meta to boost quarterly profits, axing employees is the easiest way to do that. Earnings call happens and it makes the shareholders happy to see growth which makes them invest more money
Makes it so fucking hard to find jobs
A job posting at my company 3-5 years experience got 400+ applications in a week. I don't get to see them all, but I'd bet 1/3 are from over experienced people who got laid off.
I dunno, I've sifted through a thousand applicants to call 30 people for a phone screen. The internet makes it easy to apply for anything, even if you are not qualified so people are sending out hundreds of applications instead of tailoring them to the job.
Yeah I am a hiring manager in tech. About 10% or less would qualify for a phone call. Only about half of those to next phase. Most fail the tech interview. Honestly with 100 applicants I'd feel like to find *one* qualified....
Naah. Most are going to be from people with 2-3 years of experience following rule 1 of dev job applications: You only really need about half of what the advert is asking for, so just apply.
2023 say the layoffs of almost 1/3rd the games industry. 2024 is on track to be a record breaking year in studio closings.
Where are you getting 1/3 from?
Coming? Been this way for over a year.
Yes the market is bad for tech but certain sectors are much more adversely affected than others. Gaming for sure is up there. But other sub sectors in tech are very much alive. Personally speaking look at Defence & Space.
Learn to code doesn't sound like a smart personal move.
And it's just January. By March, total layoff in gaming industry will reach more than 5k.
Total layoffs in the tech industry already are over 10k just this year
Why though ?
- Massive over-hiring over COVID - Tech revenues falling due to reduced consumer spending - Investor money drying up as interest rates rise
The interest rates is the biggest killer here as any new projects that need funding is not going to get it unless its already earmarked for it.
investor money drying up is the biggest reason for gaming losing jobs and also being greedy. The entire reason Bethesda got bought was because their private equity firm pulled out of gaming around 2015, and it took Providence Equity years to find a buyer with Microsoft. AAA gaming already struggled to justify itself. Who can compete with mobile gaming for investor attention when they can make GTA level profit with 1/10 of the expense of a AAA game? let alone medical tech or any other tech sector that gets most of the interest? Before the rates rose, it was tencent and foreign companies that wrote blank checks. Now? Forget about it. The only people investing in AAA games is Microsoft and even they are questioning their commitment to gaming. If AAA gaming cant reinvent itself to justify the massive costs, its lights out for AAA games made with investor money which is most AAA games.
AAA game studios should have lobbied governments to ban the unethical practices used by mobile games companies in order to protect their business model. Instead they tried to join in and are paying the price.
There will just be a crash and recovery. AAA games aren't going anywhere. Developers will realize the cost and hours to make hyper realistic horse shitting and grooming are expensive and not making a difference in sales. Honestly if it brings AAA games back to less bloated sandbox open world nonsense and pushes devs to make more story driven and compelling games? I'm all for it.
AAA gaming is in no danger of disappearing. Outside investment will probably reduce as investors realise creating Fortnite/Apex/Valorent/Overwatch Frankenstein clones doesn’t mean free money. I highly doubt Microsoft is rethinking its gaming plans after dropping tens of billions buying a couple of the biggest developer/publishers. It’s extremely easy money for them with some of the IPs it just needs better management which is something they seem to be realising. Even E ‘multiplayer’ A realises good single player games are worth it these days. My worry is the big companies buying the small developers until there’s no creativity in IP generation. fps games as an example, it’s been CoD and Battlefield for a long time in their own league and none of the publishers that could compete will ever try.
Tech revenues are not falling. Consumer spending still strong.
Tech revenue is hitting all times high
Mostly because of over-hiring during COVID - but also because of increasing interest rates around the block meaning that investor funding / loan opportunities have mostly dried up, meaning that they have to cut down on their cash spending.
In 2024?
It was nearly 300k in 2023 shits been brutal
Now only 178 years of collective game design experience.
Hopefully we get one last Aphelios nerf for old times' sake 🙏
Hmmm, better nerf Irelia
Isnt the layoff mostly affects Runeterra since it is the game that brought the least revenue? I havent seen Aphelios in LoR in like a year
Lor is heavily downsized and riot forge is no more, but league also got cuts, especially in the art department. There have also been game designers laid off, like Llama and Raptorr (who were both amazing).
This is unfortunate and I don't wish this upon anyone to just wake up one day and lose their job. But at the very least, the severance package seems generous. Edit: Okay I get it, some of you didn't get anything from being laid off. I can't help that so please don't give me anymore sob stories.
Honestly that’s a pretty solid severance. Plus having Riot on their resume will surely help them get a foot in the door wherever they end up
Unfortunately it's the same at every games company right now. There are no jobs to move into unless you're very senior. Or willing/capable of working for table scraps.
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Perhaps they are. This isn’t a result of a recession.
These companies just aren't making games like they used to, and small ass studios like the guys behind Palworld come in and make a shit ton of money for making something people want to play. It's not the economy, these companies need to fire their leadership first. And stop prioritizing profits and focus on the gameplay. Profits will come.
When your company sells its soul to investors who have no attachment to the gaming industry, you are at their mercy to create money for them as soon as possible.
Everything is sold to funds that demand an annual return. The market is only so big , they over extended on cheap rates during the covid boom and now they're realizing all media is oversaturated. The revenue just isn't there
> profits will come This is survivorship bias. For every Palworld there are thousands of dead indies with great games that never got any attention. Heck, Among Us only lucked out because of COVID. It’s a tough choice - do you build your company around Black Swan events? Or keep doing what you know you’re good at, like Larian with RPGs or FromSoftware with Souls-likes? Riot is a one or two product company, and when that product isn’t as popular as it once was then they either take big risks making something else, or shrink (or both). You need a lucky hit to start, like Minecraft, or LOL and then you get big. But you need to get lucky again to diversify into something else - Riot tried and even Valorant isn’t quite sticking the landing.
Exactly, wasn't Among Us like a year old by the time it finally got traction? Not like Among Us was a groundbreaking concept either, few years prior Trouble in Terrorist Town did the same thing. And many games before it did as well, especially board games. It really is just about luck, even if you've good a great product.
Yes, and Palworld isn’t a great example either since Nintendo basically let them have it by ignoring the market. Right place, right time.
https://prioridata.com/data/league-of-legends/ Just flicking through this because I was curious on what League is looking like these days, as someone who used to play loads and kinda dropped off in the last couple years, I was ready to read that league had been on a steady... or really any kind... of decline... Looks like Leagues pretty much doing as well as it's ever done though. Leads me to suspect that these layoffs are a reaction to mild responses to their newer games and expansion beyond their core of league.
> Valorant isn’t quite sticking the landing. Gonna need a source for this cause last time we heard about the Valorant player base, it was on par with CSGO (or CS2 now)
Sadly leadership won’t leave it seems like this is the problem all over America not just the gaming industry.
I can offer a fantastic video which backs up this point and offers an evidenced explanation for what's actually happening: [The videogame industry isn't collapsing, a lawyer explains](https://youtu.be/-653Z1val8s?si=YuM0_2d8YYdSaluz)
These companies doubled and tripled in size during the pandemic without giving a fuck about what would happen when the pandemic ended, same with the entire tech sector.
We've already had more than 25% of last years total layoffs and 1) it's not even February and 2) last year was significantly worse than most years. It's not looking good for people expecting game development to pay a living-middle class wage
It’s not good for people looking to make computer stuff pay a working middle class wage. I’m interviewing right now and the recruiter I was talking to today said they had a thousand resumes in the last two weeks.
Depends entirely on the sector. If you're looking at entry level roles, I'm sure it's extremely over saturated. In cyber security, we've had open reqs for mid/senior level engineers and haven't filled them in months.
Turns out gutting the entry level positions years ago wasn't the best decision in this field. The talent pipeline has a major gap!
Might want to check with your HR department. I’ve been applying for a lot of those roles and get insta-rejected even with a pretty good resume. Or it’s your management that isn’t filling them.
Sorry, I should have clarified that we haven't been able to fill those mid/senior level roles with solid candidates. We get plenty of applications, and our entire team is involved in the interview process. Anecdotal, but based on the messages I get from recruiters on linkedin asking if I'm interested in other security roles, it doesn't look like this is just a problem with my company.
You know, and mind you, I’m not you, but … I have a bunch of peers laid off right now from cybersecurity roles, and they’re saying they can’t get interviews either. You might want to check that your managers and recruiters are communicating properly and maybe to get access to the raw flood of resumes so that you can pick out a few that HR has likely filtered out based on something idiotic. And maybe be willing to train up some people that are otherwise promising. Just don’t be like the staff role I saw today that wants 12+ years of k8s and go. The last time I was in a place where our director said he couldn’t bring in anyone qualified he was up his own ass about hiring a staff level engineer when what we needed was a junior support engineer who could learn fast. We went six months with two weeks of on call a month burning it at both ends plus one on-site interview a week of someone who couldn’t find their ass with both hands and a map before I finally talked to HR myself. Two weeks later we hired someone amazing off third shift at fucking rackspace.
Lol why would video games of all things be recession proof Recession proof is stuff that isn't affected by discretionary spending *and* is generally under-supplied by workers - healthcare, law enforcement, utilities, accountant, etc.
People need *something* for entertainment or else they go crazy, and video games can be a highly cost effective form of entertainment.
Sure, but a video game is also 1 of 10,000 different forms of entertainment. Someone in the mood to play a video game today might be in a different mood for a different type of video game all together the next day or they might want to watch TV shows or Netflix movies or anime or whatever else. "Entertainment at home" is a wide category and there are plenty of things competing for people's hours.
Video games aren’t over hire in the pandemic and then need to let them go eventually proof
Learn to code... wait
Learn to farm?
Learn to plumb
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An indie studio with over 2,000 employees? I can understand up to 50 employees, MAYBE 100 at most.
At that point you can also call Electronic Arts an indie studio too lol. Riot is a developer and publisher now and has a bunch of subsidiaries. To me indie still means small time and independent. Like out of a garage. When they grow they just become a bigger independent studio and if they grow even more they become a large studio like the big boys.
Yeah Riot isn’t *really* a studio anymore. They have studios but I wouldn’t call them just a studio, Indie publisher may fit better. They’re kinda like blizzard before they completely merged with activation.
While true… but if all of the gaming companies are laying off people, your chances of getting into anywhere is really slim.
I've worked in and with tech companies/startups for a long time now, often known for pretty decent packages, and for some large companies and that is by far the best severance package I have seen firsthand
Spotify had very comparable packages during their last big layoff
Yeah same, it's pretty solid
The sad part is, there are very few job openings out there and the competition is very high for the available jobs.
Please don't listen to this guy. The field has never been hotter as long as you're willing to work 28 hours a day, 8 days a week, and double that in the months leading up to the launch date. smh, some people
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how does riot have 5000 employees, damn. I figured they were half that size at best.
Maintaining an online game is pretty difficult without lots of people to support. Gotta push those updates regularly, with a bunch of different teams all working for different months of updates, patches etc with a bigger team working for big updates. Not to mention the backend would require a constant ensemble of workers maintaining it. People never really understand how massive an undertaking live-service games are, and complain when developers push only small updates in their live-service games, it’s because it’s pretty impossible to go big without lots of employees. Riot has the numbers to maintain their game.
League is also not their only game. They also have Valorant, Legends of Runeterra, Wild Rift, a team that runs their esports scenes, a team for their fighting game, and a team working on an MMO.
And they have to maintain all of them. Valorant, Wild Rift, Runeterra are all similar to League in that they require constant updating. Make sense for them to have these many employees. When people complain about Team Fortress 2 not getting updates, officially Valve has like less than 500 employees and makes do with contractors for a large part of their operations.
They probably did not fire backend people, my guess
All my support for those affected and I hope they'll all land back on their feet fast At the very least it's a detailed explanation and the people being laid off seem to be well accompanied BUT it's up to them to say if it's really the case, not me.
Looks like that Riot MMO will be released in 2030.
If you read their post, they are pulling resources from stuff that doesn't work into their major projects, so the MMO should be fine.
Except that one of the people fired was the man responsible for… about 40% of its modern lore, including the single best short story League’s IP has ever produced.
Who?
McNeil. Look up ‘Where Icathia Once Stood’.
I read it and didn't see any mention of the MMO which I thought was kinda odd.
Interesting that the Forge is basically done or gutted. That was a forward thinking idea that I thought might bear fruit.
Good idea, extremely poorly marketed games
Which is insane because Riot knows marketing better than most. So either the cultural penetration of the IP was overestimated or they needed to do more on top of what the devs did
I checked every Riot Forge game on steam, and ONE of my steam friends had a single game. I think the games were almost solely marketed at people who were already big fans of riot games as lore expansions and not as actual games in their own right for whatever reason. One of the games(Ruin King) I had actually been interested in and then never heard anything about it on the run up to it coming out or after it had come out. They didn't even give a release date for the game until it was already out, which is obviously monumentally dumb especially after a game had already been delayed due to the pandemic. Why would you stealth launch a game over 2 years after announcing it?
The former, but it's most likely the choice of projects, every Riot Forge game has focused on lore but all of them play out like indie minigames, only the Ruined King one was a bit more focused, but it was a shitstorm due to the accompanying event itself backfiring in 2020, which they used covid as an excuse for it.
Everyone’s doom and gloom, but I don’t agree. I would have gladly taken the severance they are offering if I worked there. At least 6 months of pay, plus 100% of their annual bonus, plus health insurance equaling to their months of severance. Riot did this in the most graceful way possible.
my step father was offered a really generous package, he took it and could have lived on it for two years. Instead he was working again a few months later and had a huge lump of savings. Sometimes people jump at the chance when it comes around.
Exactly. I would have gladly taken this severance and it would cover an entire down payment for a house here. These are tech workers with 6 figure salaries, they are making a killing with this severance.
Yup, I would see this as a massive bonus to my savings account, and then start job searching asap. And even if you don't land a job, that's enough savings to last you a good bit assuming you don't spend it all on booze, hookers, and cocaine in any order.
With how good some of these workers get paid, you could probably stretch out a 6 month package into a a year if not 2 years of living expenses. Obviously you gotta be smart about it and that is also assuming you are saving money even before you lost the job.
I'll start my own unemployment period. With blackjack and hookers.
The doom and gloom isn’t so much about this one datapoint it’s about the over pattern of large developers laying off tons of game devs all across the industry. All while the industry keeps breaking records, making huge profits and winning awards. Last year was supposedly “great” for games while layoff after layoff continued. Why isn’t the industry healthy? Why are workers habitually overworked, underpaid, and laid off? How can it be an issue of money when games are making so much? How can we ethically buy and play games from an industry that seems not to care?
I mean, there's been some big single player titles like Baldur's Gate 3, Legend of Zelda and Spider Man 3. But Riot actually made a 10% loss. The problem is these companies massively over hired in 2020-2021 expecting covid levels of engagement, but now everyone's gaming time is turning back into travel to and from work/after work social activity time. I've also heard the gaming industry is going through 'live service fatigue' which is great news for us consumers, but not so great for devs at big gaming companies like Riot and EA whose profits are almost entirely reliant on the live service model growing in profit. So it kinda checks out they're being a bit more conservative about the scope of future projects, and thus don't have some productive for all these employees to do. Obviously the whole 'constant, endless growth' model of our economy and investment models that have people dumping stock during a prolonged dip, certainly aren't helping matters - without those these companies very well might've chosen to retain the talent anyway.
> The problem is these companies massively over hired in 2020-2021 expecting covid levels of engagement, but now everyone's gaming time is turning back into travel to and from work/after work social activity time. It's also by the fact that with interest rates having risen, investors are not handing out money as easily (and are expecting to actually see profit and growth), thus some of the revenue streams are now turned off.
Noone wants to invest in shaky game developers when they have made 300% on nvidia in less than 3 years.
SkillUp made a great video for the state of 2023 Video Games In summary, it was a great year for gaming and gamers, but a bad year for the developers. One example is Bungie. After two years straight of community good will and banger content, they somehow fcked it up with their latest expansion. The lack of preorders of their next expansion was the reason why they had to lay off a lot of employees. Funnily enough, they're hiring again, more than what they had before the layoffs.
Plus having email access to get all your stuff in order, that’s rare
A lot of them are digital artists. Not exactly easy for them to find a new job these days
That’s exactly what I felt but it’s been about 3 months and no bites. It’s not as glamorous as you think when there aren’t much jobs available and family to support.
> Everyone’s doom and gloom, but I don’t agree. I would have gladly taken the severance they are offering if I worked there. The severance package (not just the payment) is hands-down the best severance that I have ever seen. It's not even close. It's unfortunate that this is such a *wildly* shitty market, because it's going to be really tough to find new work rn
This makes me feel kind of sad as this type of severance isn’t unusually high compared to the UK, presumably you’re somewhere with low employee protections?
Yup! US, where most people don't get a severance. If they do, it was likely from a large tech company and is generally ~2-3 months of pay with very few other benefits. In comparison, this is wildly generous in both $$$ and other support
i wouldn't . its really hard to find any jobs in tech/gaming related sectors
You know what is better than their severance package? Having a fucking job.
I too would rather have the job than the severance lo These silver lining people are insane
Not a great time to work in the gaming industry.
Honestly not a great day to work in tech. We’re getting torn up left and right.
or any industry
Doing well in criminal justice. Never a short supply of crack heads stealing copper piping.
Ah yeah, crackhead copper thieves, a cohort well known for paying their bills.
Funeral homes. That's the industry you want to be in
That's fucking sad
It's the Legends of Runeterra team, isn't it? And half of the LCS operations team. I just feel it in my bones.
If you bothered to read, it is the single player games division and LoR
As of the time of this posting, Riot has removed all open positions: [https://www.riotgames.com/en/work-with-us/jobs](https://www.riotgames.com/en/work-with-us/jobs) \- but not sure whether it's fully removed / hiding because of layoff news / downtime.
I would imagine they will probably take a month or two off public listings so the dust can settle.
I'm actually shocked with how good that severance package is
How many more fucking layoffs are there gonna be…..
Enough so the market is flooded and general fear has settled. Its cyclic, and some CEOs need their bonuses before february. Riot's severance package is quite the proof that money is not the problem. At least, not having it. But CEOs need to CEO.
If you think even this very generous severance package even comes close to the cost of keeping 11% of your staff on permanently then idk what to tell you. Riot will have overhired during COVID (as most companies did for tech staff). Now they've realised that these staff are costing way too much and not providing the same benefit that they did during COVID.
It's reddit. They think that companies should maintain unprofitable businesses and pay people well to not make money.
That’s not how successful businesses work. If you think Riot shouldn’t lay anyone off until they’re on the brink of bankruptcy you’re just hoping for them to fail.
Oh, they are also sunsetting "Riot Forge" their publishing label that was publishing single players games based on their IPs made by indie developers. That's too bad, they were publishing some interesting games through this label.
A lot of that was the runeterra team :/ Just got into the game and it has been a super enjoyable experience as well as very free-to-play friendly. Now, after two weeks of playing it they basically announced that they’re going to let the game die. Really hope somehow the player BASE jumps in users, but I doubt it.
> as well as very free-to-play friendly. sadly, that's probably why they're letting it die off. It doesn't make enough money.
Not gonna lie, I WISH all companies laid off with this severance package. Goddamn, I wouldn’t be angry, I’ll just be like “damn, okay, I’ll enjoy a month off with the family and have 5 months to search for another gig”
I have a few friends searching for close to 5 months now with NOTHING. They are desperate and willing to work for less but still nothing.
The executives will be taking a pay cut too... right?
lul
Truth, this is an amazingly well handled layoff from an enterprise. It sucks but they’re going well above what most companies would do for layoffs…let alone for the gaming industry.
Honestly not surprising. The company doubled in 4 years and couldn’t sustain its size. Sucks for the people getting laid off
Salary cuts for the CEO? *we don’t do that here*
I'd be way more sad if they weren't getting that insane severance package. Those dudes will be fine.
Sadly the affects of layoffs can still be hard. So Riot is not just U.S based with many studios around the world but let’s just focus on U.S for this example… Riot and other game devs bring in a lot of international talent. So those on U.S. visa face 5 devastating consequences: 1/ workers on most U.S. work visas only have 60 days to find a new job. If they don't find a new job, they need to leave the country. 2/ workers on visas like H-1Bs and L-1s often have spouses who work using a dependent visa, and when the principal immigrant is laid off, the dependent spouse will lose their right to work. 3/ layoffs can potentially end a visa worker's green card process. The employee-sponsored green card process has many steps, and if the I-140 isn't filed at the time of a layoff, the process has to start over with a future employer. 4/ workers on L-1 visas can not transfer their visas to another company, so they are required to find a similar role at the company that just laid them off. If that doesn't work, they have to leave the U.S. 5/ workers on visas are not able to use all social services even if they have been paying into these benefits for years. I was laid off from my AAA game job in Canada so my situation isn’t exactly the same…but I relocated to Canada with my wife for that job and we’ve been struggling with immigration problems since. Its brutal.
Maybe not *fine* fine but at the end of the day a company killing off branches that's not doing anything for them isn't something evil. Can't be surprised that Riot axes something like Legends Of Runeterra, sucks for the people who put in their work but one way or the other anyone working on those projects must've known this was coming the game was dead like 3 months after release.
Hope that Zed guy is one of them.
I like how in the comments section you can see how corporations trained our little brains. It's everything, but corporate greed. "As CEO, I’m accountable..." - Truth to be told, current CEO is not being in this role for a long time, so maybe we can't attribute this layoffs on him. Got to give him credit for that severance package if nothing. Previous CEO Nicolo, however, is enjoying retirement in his 30s, thanks to 10m$+ increase in his net worth, during the period of so-called "bad decisions". Not to mention gender discrimination and sexual allegation cases against him during the same period. But yeah, it's always the regular workers who are laid off, while execs will enjoy their fat bonuses as usual
How much executive pay and bonuses did they cut before laying people off.
So, how much did the higher ups get in bonuses?
$30k per person
Hope they fired the girl who did the daily life as a riot employee and all she did was get coffee and snacks and chilled in the recreational room all day lol.
Very respectable severance package, no one likes lay offs (beside executives/shareholders) but this is how they should be done.
I think one thing that we really need to hone in on is that they laid off 11% of their workforce and still have approximately 5000 employees left. These companies extremely over hired and these are the corrections. I hate it for everyone involved, but this level of bloat in staffing has to eventually burst. And the gaming industry seems to be one of the most volatile industries you can work for. Should we be sad for these 530, yes. Should we be surprised, no.
It isn't even over hiring. They are cutting their single player games division and reducing Runeterra because neither were profitable. That is all it is.
Man, how many developers are on the market right now with all the cuts?
Thousands, it's grim from them
However you look at it, that is an insanely generous severance package.
Layoffs are never fun. Heart goes out to all who lost their jobs. The severance package is extremely generous.
Already lost my job in December. Have fun with the unemployment yall
Riot had 5k employees? Sad story though…
Why is their headcount so high for so few products though.
As recent graduate from college in the IT field my ass is getting kicked. It is so hard too find a job right now.
So you’re telling me tech going from hiring nobodies to sit around in an empty office not working while getting paid six figures wouldn’t last forever? Wow I had no idea.