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- Faze cut 20% of workforce in February
- Company ‘not abandoning aspirations’, says CEO Lee Trink
Esports organisation Faze Clan has laid off about 40 per cent of its workforce, according to Digiday.
It marks the second round of job cuts in 2023 from Faze after it culled roughly 20 per cent of its staff in February.
In an email to Faze employees, seen by Digiday, Faze chief executive Lee Trink cited the economic climate for the latest layoffs, as well as the need for ‘a heavy focus on our costs and redefining our structure to set us up to not only survive in this increasingly challenging macroeconomy, but prepare for the best possible future’.
Trink added: ‘This does not mean that we are abandoning the aspirations we have for Faze – we are simply setting some of our larger goals aside so we can put our heads down and focus on what’s directly in front of us.’
In March, Faze announced a net loss of US$168.5 million for the 2022 financial year. This included a non-cash, one-time accounting charge of US$115.3 million, which related to the replacement of a prior debt facility with new shares of the public company under the terms of the go-public transaction. Excluding the charge, Faze’s net loss would have been US$53.2 million.
Faze ended 2022 with US$37.2 million in cash and equivalents, adding that it believes its cash position is adequate to fund its operations and support investment plans for 2023.
SportsPro says…
It has been a rocky road for Faze having gone public last summer in a merger with the B. Riley Principal 150 Merger Corp (BRPM) special purpose acquisition company (SPAC), which valued the Faze Holdings combined entity at US$725 million.
Since then, Faze Holdings has seen its stock price fall from a high of US$24.69 on 30th August 2022 to 55 cents on 22nd May 2023.
Though Faze’s revenue for 2022 was up 32 per cent year-over-year (YoY) to US$70 million, the company remains unprofitable and its plight feels reflective of the wider esports market. All the attention and investment amid the pandemic has been offset by the current economic climate and other unforgiving business realities.
Assuming the esports winter is here, or is at the very least drawing closer, then Faze feels this latest restructuring will ensure it can be in the best position to prosper if and when the competitive gaming spring arrives. Given it is viewed as a flagbearer for the industry, the wider esports market will be hoping Faze can turn things around.
