North American esports organisation FaZe Clan has undergone a wave of layoffs, citing a difficult economic environment and a lack of capital.
The layoffs reportedly account for roughly 20% of FaZe Clan’s staff, according to Business Insider, who cited a company spokesperson.
In an SEC filing on February 16th, FaZe Clan announced what it called a ‘reorganisational plan’ to streamline its workforce.
In a statement sent to employees, FaZe Clan CEO Lee Trink said that despite ‘incredible growth’, the layoffs were needed due to changes in the economic environment since the company went public in July 2022.
Trink said that the company has had to re-examine the breadth of its growth strategy in light of its current balance sheet, stating that it did not have the capital required to execute on some of the opportunities it had originally planned. This, alongside wider economic uncertainty, led to the layoffs.
“This reduction and increased financial discipline, alongside our growth in revenue, will help enable us to become profitable sooner, setting up FaZe Clan for long-term success,” Trink’s statement reads.
“As we embark on 2023 with a more streamlined, nimbler organisation, our key focus is on the core aspects of what makes FaZe FaZe, and what has allowed the brand and the business to grow at an incredible pace over the past five years.”
The layoffs come amid a continued nosedive in FaZe Clan’s stock price, which peaked above $18 (~£15) last year but has fallen to $0.68 (~£0.57) at the time of writing. FaZe Clan risks being delisted from the NASDAQ stock exchange if its share price remains below the minimum $1 threshold set by the exchange.
Trink’s statement adds that the company is prioritising investment in talent as well as building upon the growth of its partnership business — a strong point for the organisation.
The layoffs come despite FaZe claiming in the statement that it anticipates reporting a 25% year-on-year increase in revenue growth in 2022.
“I am confident that we can continue growing revenue in a healthy way, while having more discipline around spending — executing on this strategy will enable us to reach our ultimate goal of profitability, while being a brand our community and culture is proud of,” Trink’s statement continued.
“That goal remains squarely in front of us, and we’re committed to positioning FaZe as the global leader in our industry and for long-term success.”