FaZe Clan, the esports organization that achieved a remarkable $725 million valuation upon going public last year, has announced that it will lay off 40% of its staff. This development follows a challenging period for the professional video game industry and comes a week after appointing Erik Anderson as president.
According to Faze Clan, the decision to implement these layoffs came as a result of the company’s desire to control costs and redefine its structure. This move is seen as a strategic step to help the company survive in an increasingly challenging economic climate.
“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,” CEO Lee Trink said in an internal email to employees.
This announcement comes after a difficult financial period for FaZe Clan. Having debuted on the market at $13 per share, its stock has dramatically fallen to around 59 cents per share, placing it at risk of being removed from Nasdaq.
While the organization reported a $53 million loss last year, it maintains a robust social media following that has secured content deals with big names such as NFL star Kyler Murray and Bronny James. Partnerships with large brands such as the NFL, McDonald’s, and DoorDash have also been notable developments.
However, these achievements have been overshadowed by internal issues and criticism. Former FaZe Clan President Greg Selkoe described cultural problems within the organization, citing internal conflicts as a serious problem. Additionally, long-term members have voiced concerns about the organization prioritizing new, flashy signings over long-standing partners.
In the face of these challenges, FaZe Clan said they were committed to pushing forward. As Trink stated, the company’s strategy is to focus on immediate challenges while continuing to nurture its esports victories and partnerships.