Beijing: Chinese technology giant ByteDance, the parent company of TikTok, is reportedly reducing its workforce by hundreds in its gaming unit, signaling a withdrawal from the fiercely competitive video gaming sector.

The job cuts are taking place at Nuverse, a video game publisher and subsidiary of ByteDance based in Beijing. According to a source familiar with the matter, the ongoing round of layoffs is expected to impact "several hundred people."

In response to inquiries, a ByteDance spokesperson stated, "We regularly review our businesses and make adjustments to center on long-term strategic growth areas. Following a recent review, we've made the difficult decision to restructure our gaming business." Despite substantial investments made by ByteDance in Nuverse over the past few years to compete with industry leader Tencent, this move signifies a retreat from the video game sector.

While the gaming division is undergoing significant downsizing, the source clarified that the current cuts do not signal a complete closure of ByteDance's gaming business. The staff reductions are aimed at allowing ByteDance to focus on core businesses and streamline the organization. Games that have not yet been launched are reportedly set to be shut down in December. However, games with active players, such as the popular mobile action title "Crystal of Atlan," will continue operations as ByteDance looks to divest assets.

Launched in 2019, Nuverse aimed to challenge Tencent's dominance in the gaming industry but fell short of the commercial success ByteDance had envisioned. ByteDance's major competitor, Tencent, remains the global leader in video game sector revenue, dominating the Asian market and investing in game studios worldwide.