FaZe Clan’s woes continue with a second round of layoffs in 2023

More layoffs have come to FaZe Clan. The organization known for blending esports and entertainment will cut about 40% of its workforce as it looks to overcome the financial difficulties that have plagued it since its July 2022 debut as a publicly-traded company.

FaZe CEO Lee Trink announced the layoffs in an email to employees that went out on May 19. The former recording industry exec cited adverse economic conditions as a cause of the cuts. As FaZe fights for survival during a challenging year, the company is prioritizing short-term operations over long-term plans. “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,” reads a portion of Trink’s email shared by Digiday.

Though once hailed as a unicorn, FaZe Clan failed to live up to expectations after it went public via a merger with a special purpose acquisition company (SPAC). The Los Angeles-based company attempted to rustle up $100 million from investors, but its actual fundraising total ended up far short of that mark.

FaZe’s lack of on-hand capital led to its first round of layoffs this year. In February, it let go of 20% of its employees. “Our original IPO plans contemplated raising significantly more capital,” Trink said at the time.

The reduction of FaZe’s workforce was followed by more bad news. Snoop Dogg, who had joined FaZe as one of its high-profile celebrity members, ended his relationship with the company in April. By that point, FaZe’s shares were worth a fraction of their initial price. FaZe initially traded at $13 per share; as of this post, that figure is down to 58 cents per share

As former FaZe employees leave the company, they are sounding off about its issues. Greg Selkoe, who served as FaZe’s President before founding the gaming org XSET in 2020, discussed his former employer during a recent interview with Dexerto. “There were a lot of problems within the culture at FaZe,” Selkoe said. “It was always a zero-sum game where if someone in the company won, there was someone else mad in the company, there was a lot of fiefdoms and fighting, so first thing we’re like, whatever we do, it’s got to have a good internal culture.”

That infighting has recently spilled into the public eye. Longtime FaZe members have criticized the company for prioritizing splashy new signings over longtime partners. “Someone else can come in as late as last year, who’s not from this industry, never lifted a finger for FaZe, probably didn’t even know what FaZe was, and get three times the amount of shares that I have, and an annual salary that’s more money than I’ve ever been paid by FaZe,” Jakob ‘FaZe Teeqo’ Swaerden said in a recent video.

Despite taking these hits to its reputation, FaZe is soldering on. It’s still producing winners in the esports world, and despite the reduction of its workforce, it’s still chasing new partners. According to Nordan ‘FaZe Rain’ Shat, who spilled FaZe’s beans on Twitter, the company is looking to ink a partnership with Stranger Things star-turned-Twitch streamer Grace Van Dien.