FaZe Clan has undergone significant turmoil, resulting in a wave of layoffs that have impacted 20% of its staff.
FaZe Clan Implements Layoffs as Company Struggles Post-NASDAQ Debut
North American esports organization FaZe Clan has been experiencing significant turmoil since going public on the NASDAQ in July 2022. As a result, the company has laid off around 20% of its staff due to a lack of capital and changes in the economic environment. Despite the layoffs, the organization’s CEO, Lee Trink, claims that there has been “incredible growth” in revenue.
The rapid expansion of FaZe Clan has seen the company cross over into several industries, including the latest partnerships with major brands such as Porsche, McDonald’s, and the NFL. However, concerns and fears about the organization’s future have been growing. The company has faced various controversies, including allegations that it participated in a malicious cryptocurrency ‘pump-and-dump’ scheme. FaZe Clan has also reported a $37 million global loss in 2021, despite reporting $52 million in gained revenue.
Most recently, FaZe Clan has faced significant challenges in the esports arena. Although the organization’s esports teams had a banner year in 2022, there is a drought at present that is making it difficult for any FaZe-branded teams to gain ground. Atlanta FaZe recently won the Call of Duty League Major II event, which was the squad’s first victory in over a year.
FaZe Clan CEO Announces Layoffs Amid Growth and Revenue Struggles
The layoffs come amid a continued nosedive in FaZe Clan’s stock price. The company’s stock value currently sits at just $0.68, which is a stark comparison to its all-time high of $17.43. The organization risks being delisted from the NASDAQ stock exchange if its share price remains below the minimum $1 threshold set by the exchange.
In an effort to mitigate the impact of these challenges, the company announced a “reorganizational plan” to streamline its workforce in an SEC filing on February 16th. In a statement to employees, CEO Lee Trink highlighted the need for layoffs and the reasons behind them. Trink noted that the company did not have the capital required to execute on some of the opportunities it had originally planned, in addition to wider economic uncertainty, which has led to the layoffs.
The layoffs at FaZe Clan are part of a larger trend in the esports industry. In recent weeks and months, there have been widespread layoffs around the industry, including OpTic Gaming, Xbox, Bethesda, and Riot Games. While FaZe Clan is not exempt from the layoffs, the message of “incredible growth” is a strange one to put out while the staff is being actively dismissed.
The aftermath of Faze Clan layoffs: what’s next for the esports giant?
Despite the challenges, FaZe Clan still regards talent investment and partnership business growth as essential. The staff reduction is expected to expedite profitability, enabling long-term prosperity.
Trink’s message underscores the organization’s focus on maintaining the fundamental elements. These core features have propelled FaZe Clan’s tremendous success over the past five years.
Trink is optimistic despite the challenges and believes that revenue growth can continue. The plan includes better spending discipline to reach the goal of profitability. FaZe Clan aims to remain a brand that its community and culture can be proud of.
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