Tencent Holdings Ltd's (OTC:TCEHY) Sumo Group, the parent company of Secret Mode and other game developers, has announced layoffs affecting 15% of its workforce, citing challenges facing the games industry.

In a statement, Sumo Group said: "The difficult decision to reduce our costs across the business in a number of ways is a direct result of these challenges, and unfortunately will include a reduction in the number of people the business can support."

They added: "Every alternate route to limit the impact to our people is being considered but sadly this process of transformation will affect up to 15% of our people across the Group in Canada, UK, Poland, Czech Republic and India."

With approximately 1790 employees, around 250 individuals are impacted by the layoffs. The closure of Timbre Games, a studio within Sumo Group focused on AAA games, may be a consequence of this decision, according to Polygon reporter Nicole Carpenter.

Sumo Group acknowledged the difficulties faced by its employees during this process: "This is a challenging situation for everyone at Sumo." In the press release, the company outlined its focus on supporting staff and collaborating with partners to address the situation.

The broader context highlights a widespread issue within the industry, with major players like Take-Two Interactive Software Inc (NASDAQ:TTWO), Microsoft Corp. (NASDAQ:MSFT), and Square Enix Holdings Co. (OTC:SQNXF) also announcing layoffs recently.

In 2023, over 10,000 developers were affected by layoffs, and the trend appears to continue into 2024.

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