TikTok parent company, ByteDance, has announced its plans to lay off a significant number of its gaming staff as it restructures its gaming business, called Nuverse.
The company said that the decision was made after a regular review of its businesses and a focus on long-term strategic growth areas.
The layoffs, which began on Monday, 27th November have left many Nuverse employees in limbo, as the exact number of affected staff remains unclear. Nuverse, which was established in 2019, boasted about 3,000 personnel in 2021, and has maintained a similar size in recent years. The gaming division has also invested heavily in acquisitions, such as the $4 billion purchase of the Shanghai-based gaming studio, Moonton, which is known for its hit mobile game Mobile Legends: Bang Bang.
However, ByteDance’s spokesperson said that some parts of the gaming team will be retained, suggesting that the company is not completely exiting the gaming industry. The spokesperson also said that ByteDance is committed to providing support and assistance to the affected employees.
The news of the layoffs comes amid reports that ByteDance is considering selling Moonton to a Saudi Arabia-based firm, after acquiring it in March 2021. Reuters reported that ByteDance has been in talks with the Saudi Arabian sovereign wealth fund, the Public Investment Fund (PIF), about a possible deal, citing sources. The PIF is one of the largest investors in the gaming sector, having stakes in companies such as Activision Blizzard, Electronic Arts, and Epic Games.
ByteDance’s move to scale back its gaming business also follows its recent downsizing of its mixed reality division, which was responsible for developing the Pico AR/VR headset, a rival to Meta’s Quest headsets in the Chinese market.
Earlier this month, ByteDance laid off hundreds of employees and halted further expansion of its mixed reality unit, citing market challenges and strategic adjustments.
ByteDance, which was founded in 2012, is one of the most valuable private companies in the world, with an estimated valuation of over $250 billion. The company is best known for its short-video app TikTok, which has over 1 billion monthly active users worldwide. The company also operates other apps, such as Douyin, Toutiao, and Xigua Video, in various markets.