One of the most well-known organizations in esports, FaZe Clan, has laid off 20% of its employees. While it’s unclear exactly how many people that is, the percentage is definitely quite high and reminiscent of other companies that have also laid off massive amounts of people in one fell swoop. The CEO blamed the current economic situation for the layoffs.
According to FaZe CEO Lee Trink, the layoffs have to do with “uncertainty in the overall economy” and an organizational focus on “financial discipline.”
Layoffs despite growth?
In a memo to FaZe Clan employees, the CEO explained that FaZe has shown great growth and that the company’s revenue was up a quarter of a percent last year compared to the year before (i.e., 2021). He also indicated that he is “optimistic about the future of FaZe.” Last year, FaZe Clan went public on NASDAQ, becoming the first esports organization of its kind to make such a move.
FaZe Clan is officially a publicly traded company. $FAZE pic.twitter.com/QjrOhJ9ffx
— FaZe Clan (@FaZeClan) July 20, 2022
The lifestyle and entertainment brand was able to produce tremendous hype, but then reality slowly set in. Now, six months after going public, FaZe Clan is in danger of being delisted, while the company’s stock price keeps falling. A fraction of FaZe Holdings Incs earnings are worth just $0.68. That’s in sharp contrast to the $17.43 it was initially worth. Apparently, that loss has the company so strapped for cash that they’ve now laid off some employees.
FaZe wants to save money
The CEO had this to say about the current situation, “Our original IPO plans were to raise significantly more capital. That capital was to fund a strategy that would allow us to take advantage of several new opportunities. … Over time, as we went public, we hired staff to take advantage of these opportunities.” FaZe hopes the layoffs will help the company reach its goal of profitability in the near future. FaZe’s new direction appears to focus on “discipline” in terms of its spending.
FaZe Clan reportedly fired 20% of its employees after the organization's stock price continued to plummet.
FaZe clan CEO Lee Trink said they had to take necessary steps in response to "uncertainty in the overall economy" and an organizational focus on "financial discipline." pic.twitter.com/eV8k8HByhr
— GameRiv (@GamerivGames) February 17, 2023
As one of the leading Esports organizations that others are trying to emulate, this could have a bigger impact than expected. Other Esports organizations, including 100 Thieves and even Riot Games itself, have also made massive layoffs recently, following the lead of many companies in the tech industry that are fearful of a coming economic downturn. The companies’ employees were laid off in order to save money, or for the company to continue making a profit.