Roblox, a community-focused gaming platform popular with children, has cut a significant portion of its talent acquisition team, marking a shift in the company’s focus from expansion to revenue.
Roblox confirmed in a statement to TechCrunch that approximately 30 employees in its talent acquisition organization were laid off on Monday. Other teams are not affected.
“Over the past few years, as Roblox has worked toward aggressive growth goals, we needed to invest more in our TA organization,” a Roblox spokesperson said.
“Our commitment to achieve cash compensation growth in line with booking growth by the end of the first quarter of 2024 will require a smaller talent acquisition organization to meet adjusted hiring needs. This action is the result of lowering our recruitment targets to better align with our growth objectives.”
There were also hints that a hiring slowdown could be considered as part of continued efforts to cut costs. As Michael Guthrie, Chief Financial Officer of Roblox share Regarding the company’s recent second quarter financial results:
There will be leverage in almost every cost area over the next 12 months. Because of the slowdown in employment, I think we will see a slight boost in cost of goods sold. And I think we’re going to see some leverage on compensation costs because we’ve had a little bit of a slowdown on infrastructure, trust, and safety. We’ve already bridged the gap quite meaningfully on these two points.
The company has seen rosy growth in recent years, with daily active users nearly tripling since Q1 2020 to 66 million at the beginning of this year. As its business expands, so does its spending on developer compensation. Developer exchange fees, the amount Roblox pays creators who cash out in-game currency they earned, totaled $348 million. For the first six months to June 2023, it was $290 million in the year-ago period.
Despite the increase in the number of users and time spent on the platform, the amount users spend is not increasing. His average booking value per DAU since Q2 was $11.92, down 3% year over year. Roblox remains unprofitable, with its net loss for the second quarter of 2023 increasing to $282.8 million from $176.4 million a year earlier.
Roblox’s business in China is a joint venture established with Tencent in 2019, so the latest job cuts do not seem to have an impact.
