FaZe Clan layoffs showcase a move to restructure amidst a tough year for the industry.
FaZe Clan has reportedly enacted layoffs of about 20 percent of its work face following a restructuring that started in December. According to a post from Business Insider, the layoffs were made known to staff by an internal memo from FaZe CEO Lee Trink. The company was unable to raise its expected capital after going public; and has decided to salvage things with a reorganization going forward.
FaZe Clan went public on Nasdaq in 2022 through a SPAC, starting off with a $1 billion valuation. They showed promising signs as a public company, reaching an all-time high of $20 per share in August last year. However, their value has since taken a nosedive with share price currently at $0.68 at the time of writing.
FaZe are also at risk of being delisted by Nasdaq as the American stock exchange requires company's shares listed to trade at a value higher than $1 per share. Any company unable to keep up with this requirement for 30 consecutive days are in danger of a deficiency notice.
2023 has been a tough year for tech and gaming companies with several thousand layoffs seen across Amazon, Alphabet, Microsoft and Riot Games among others. These effects are also spilling into the esports industry with investors more reluctant to put in more money. FaZe Clan also join the likes of 100 Thieves and Optic Gaming who also recently laid off workers.
FaZe Clan layoffs memo details
From the memo shared by FaZe's CEO Lee, the company expects to report a 25 percent increase in revenue growth from 2021. He also explained that they hired new staff to execute their plans amidst the IPO plans. However, due to the different economic environments of today, the organization will refocus their strategy.
This re-focus, plus more uncertainty in the overall economy has led us to reducing our employee base. This reduction and increased financial discipline, alongside our growth in revenue, will help enable us to become profitable sooner, setting up FaZe Clan for long-term success. As we embark on 2023 with a more streamlined, nimbler organization, our key focus is on the core aspects of what makes FaZe FaZe, and what has allowed the brand and the business to grow at an incredible pace over the past five years.
The new strategy for FaZe Clan will be to continue to strengthen the growth its partnership business has experienced; investing in talent more and delivering content to its audience. Talent investment will focus on recruiting new superstars and bringing value to all FaZe members.
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