TikTok's Parent Begins Mass Layoffs In Gaming: Report

TikTok parent ByteDance is reportedly scaling back its gaming department, Nuverse, after two years of underwhelming performance.

ByteDance's spokesperson stated that the company is restructuring its gaming business to focus on long-term strategic growth areas, TechCrunch reports. 

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This decision has led to mass layoffs starting Monday, with the future of many Nuverse employees still uncertain. Nuverse had grown to about 3,000 employees by 2021 and maintained a similar size over the years.

ByteDance had invested heavily in gaming, including a $4 billion acquisition of Shanghai-based Moonton. However, recent reports suggest ByteDance is considering divesting Moonton. The company's struggles in gaming, along with challenges in its virtual reality venture Pico, raise questions about the effectiveness of its data-driven strategy, thriving in the short video sector in the gaming industry. The gaming sector demands a longer, more patient, creative process, which ByteDance's approach may not suit.

Nuverse's lack of a breakthrough title or commercial success has likely led to its reassessment as a critical revenue driver for ByteDance. The company, one of the few major Chinese internet firms yet to go public, faces challenges amid U.S.-China tensions. The broader Chinese internet industry, including the gaming sector, is also grappling with regulatory crackdowns and macroeconomic challenges, leading to business downturns and workforce reductions.

Earlier this year, ByteDance showcased its AI chatbots to the masses following a nod from Beijing regulators.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Photo: Olivier Bergeron Via Unsplash