Dubai-based esports company Galaxy Racer has shuttered esports operations at Her Galaxy, the company’s North American women-centred esports initiative.
Roughly 10 staff have been laid off from the division, Galaxy Racer told Esports Insider, with North American operations instead being shifting toward the creator economy.
In a statement posted on social media on December 30th, Galaxy Racer said it had made ‘significant strides’ in North America with Her Galaxy but is ‘temporarily pausing’ its esports activities. Instead, it will shift toward an influencer and creator-focused direction spearheaded by Joyce Ajouri, Director of Operations at Galaxy Racer NA, who was hired in August.
The announcement followed a report by The Esports Advocate on November 30th which claimed the organisation owed North American employees three months’ back pay. A subsequent update to the report stated that payments had started being made on Wednesday (29th) evening or early Thursday (30th) morning.
Sources told The Esports Advocate in its report and earlier reporting that Galaxy Racer had also cut off communication with the affected employees, who were considering legal action due to consistent lack of payment and communication, and that the decision to fire employees had been ‘sudden’.
Dot Esports additionally reported on December 1st alleged discontent amongst Apex Legends players about a $100,000 (~£79,300) HER Galaxy tournament the company ran in June, prize pools for which have not yet been paid.
In an interview with Esports Insider, Galaxy Racer Chief of Staff Walid Singer strenuously denied many of the allegations. He said that all staff have been paid, and that the organisation had been regularly communicating with affected staff to navigate their handover and termination.
However, he admitted that some payments had been delayed, which he said was a result of issues related to its ongoing merger with Riva Technology and Entertainment. He claimed the merger transaction was causing ‘delays across the board’ due to corporate restructuring, including company and bank closures, amongst other extenuating circumstances.
Staff were notified of their termination in an all-hands meeting followed by a Q&A, he added in response to allegations the layoffs were handled poorly. Singer claimed staff had been paid even before they were notified of their termination on November 30th. Esports Insider could not independently confirm when the staff were paid.
“The process when we laid them off was directly with us, it was not through legal [routes],” Singer said. “We made sure that finance, legal, HR and Joyce [Ajouri] were all on the call with everybody. Joyce led the conversation with that, and led a Q&A session and HR sent out the termination letter. You can’t cut communication when they still have to do equipment handovers and all of that stuff, that is all in process and being coordinated directly with HR.”
Additionally, Singer said Galaxy Racer was not late on payments for its HER Galaxy Apex Legends tournament in June as the final payment deadline was written into contracts as December 23rd — and maintained the organisation has all intentions of paying on or before that date.
The decision to cease esports operations and lay off employees at its North American branch is a result of those operations proving commercially unviable, Singer noted. He said the company had invested heavily in women’s esports in the region and other regions but struggled to monetise its North American esports activities, a factor in its decision to lean further into the more successful creator space.
Based in Dubai, UAE, Galaxy Racer has operations in several countries globally. These include Abu Dhabi-based esports organisation Nigma Galaxy (formed after a merger with Team Nigma), Portuguese esports organisation Luna Galaxy and Galaxy Racer Pakistan.