FaZe Clan has made sweeping layoffs in May, coming right after their last big wave in February. Is the Esports giant in trouble?
FaZe Clan are one of the biggest names in esports. They field teams in loads of different games and are synonymous with the esports boom of recent years, but things haven’t gone so well in recent months. FaZe Clan layoffs have started back up. After they laid off 20% of their workforce back in February, they’ve now laid off another 40%. The company is rapidly shrinking with many employees let go over email.
The current FaZe layoffs come in the middle of a difficult time for the team and economic turmoil for a lot of orgs. Sponsorship and investments in esports orgs have died off a little bit. FaZe Clan reached a huge size in the last few years, even going public as a tradable stock. However, it looks like FaZe might not have the easiest ride ahead. They’re fast running out of employees to let go.
FaZe Clan Layoffs – Another 40% of Workforce
FaZe Clan is a central org to a number of the biggest and most successful esports like CSGO. Their current financial hardship has led to even harsher and bigger layoffs than earlier in the year though. They’ve now laid off another 40% of their workforce, meaning the total staff laid off since 2023 began is now huge.
This is the second large round of layoffs we’ve seen from the org. The first happened back in February when the org’s staff were only informed via email that they were heavily cutting back. A representative for the Clan did say the layoffs don’t mean they were scaling back their ambitions. Although, it’s hard to look at two rounds of these layoffs and conclude that the org can continue growing or get back to the staggering valuation made when it went public.
FaZe Clan debuted as a publicly tradable stock fairly recently, reaching a $725 million valuation. They’ve since suffered huge drops in their stock price. Arguably, the heavily decreased stock price (now at a $42 million market cap) might be a more accurate representation of the value of the company. At least compared to some of the crazy numbers being thrown around when they went public. Any firm having to lay off such sweeping parts of their workforce likely isn’t continuing to grow in an emerging sector.
The FaZe troubles aren’t an isolated problem though. They’re more an example of the ongoing problems and economic troubles facing esports organizations. While FaZe layoffs have been bigger than a lot of other orgs, they’re far from the only company to face these problems.
What Do FaZe Problems Mean for the Wider Industry?
The org’s size and influence in the esports space often means that FaZe are held up as an example of the general economic atmosphere in esports. FaZe clan layoffs definitely don’t look too healthy. These new layoffs show that the company is struggling to maintain its current size and plans in the face of shrinking revenue opportunities.
FaZe Clan making sweeping layoffs doesn’t mean that the entire esports industry is facing a downturn. Although, it does seem a lot of major orgs, devs, and other traditional groups are having to look elsewhere for revenue. However, others have pointed to mismanagement at FaZe.
The org’s income still relies heavily on sponsorship and merchandising sales though. With major esports sponsors stepping down their efforts, some of FaZe’s problems are common to the general esports downturn we’re currently looking at. Other problems seem more self-inflicted though, and it seems their staff is paying the price with FaZe layoffs.
One of FaZe’s former presidents has spoken about leaving the firm in recent years, after selling out all of his equity. Greg Selkoe discussed the mismanagement of the company that led to a $53.2 million loss over the course of 2022. FaZe Clan has a long road back to profitability here. However, they might soon reach the point where there’s no more staff left to lay off. With even key figures in the company condemning more recent management, FaZe may need a bigger change.