TikTok parent company, ByteDance, has announced intention to significantly scale back operations by carrying out mass layoffs of its employees in its gaming division, called Nuverse.

“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,” a ByteDance spokesperson told the media in a statement.

The recent wave of extensive layoffs commenced on Monday, leaving many Nuverse team members uncertain about their professional future. The exact number of employees affected by the restructuring remains unclear. However, in 2021, Nuverse rapidly expanded to approximately 3,000 personnel and has maintained a similar size in recent years.

ByteDance has also invested significantly in acquisitions, including the acquisition of the promising Shanghai studio Moonton for $4 billion. Reuters recently disclosed that the company is exploring the possibility of divesting the studio and has engaged in discussions with a Saudi Arabia-based firm.

Reuters first broke the news about the layoffs on Monday morning, reporting that ByteDance would soon announce the “winding down of its Nuverse gaming brand and full retreat from mainstream video games,” citing sources. But ByteDance’s comment suggests that portions of the team will be retained.

ByteDance acquired Moonton Technology, a Shanghai-based gaming studio, in a notable $4 billion transaction. Moonton is renowned for its mobile multiplayer online battle arena (MOBA) game, Mobile Legends: Bang Bang, which was launched in July 2016.

In 2022, ByteDance introduced the Pico AR/VR headset as a competitor to Meta’s Quest headsets in the Chinese market. However, just this month, the company downsized its mixed reality division, letting go of hundreds of employees and putting a halt to further expansion.