FaZe Clan struggles as the stock price falls
Back in 2022, FaZe Clan went public to raise capital. The funding at that time mainly was to focus on new opportunities. They went public on Nasdaq and started with a $1 billion valuation. The company did well as a public company and reached around $20 per share in August 2022. However, recently they are facing a lot of issues as their stock price fell below $1 and currently stands at $0.68. With this change, FaZe Clan did layoffs of around 20% of its workforce as a result of a restructuring that began in December. The layoffs were announced to the team in an internal memo from FaZe CEO Lee Trink, per a report on Business Insider.
Bad year for gaming organisations
The beginning of the year 2023 has been difficult for digital and gaming businesses; with thousands of layoffs reported at organisations like Amazon, Alphabet, Microsoft, and Riot Games, among others. Investors are becoming less willing to make new investments in the esports sector as a result of these consequences. Along with companies like 100 Thieves and Optic Gaming, FaZe Clan recently laid off its staff.
Reduction of Staffs
Announced through a memo shared by FaZe Clan’s CEO Lee Trink, stated that in 2022, there was a growth of 25% in terms of revenue. The original IPO plans included obtaining a lot more money for the organisation. The money was set aside to support the plan that would allow them to pursue new opportunities. They hired new people over the course of going public to take advantage of those chances. However, that didn’t come out fruitful. Now, by reducing the workforce, FaZe Clan plans to achieve its objective of profitability. FaZe Clan is going for a new strategy that appears to be centred on “discipline” when it comes to their spending.
The benefit of the layoff
According to FaZe Clan’s CEO, this will allow the organisation to have a look at their present condition. Employee reduction will help them to grow their financial discipline and reduce economic uncertainties. To be more profitable and grow the revenue it will be beneficial and will set FaZe up for long-term success.
Following the decision and implementation of new strategies, FaZe Clan will seek to boost the success of its partnership business while spending more on talent and providing its audience with content. Investment in talent will be concentrated on finding new players and enhancing the experience of every FaZe staff.