Team17, the UK-based developer of Worms and publishing label for the likes of Overcooked, Dredge, and Blasphemous, is the latest games company to be cutting jobs.
Faze Clan fires CEO as esports industry struggles
13.09.2023 - 20:45 / theverge.com
By Monica Chin, a senior reviewer covering laptops and other gadgets. Monica was a writer for Tom's Guide and Business Insider before joining The Verge in 2020.
Faze Clan, a merchandising and influencer marketing agency that was once synonymous with the esports space, has fired CEO Lee Trink. CFO Christoph Pachler will take over for Trink on an interim basis, Bloomberg reports.
Faze Clan cultivated a lavish and freewheeling image during its early years. The firm maintained teams across many different esports titles, created gaming-adjacent content for social media platforms like Twitch and Snapchat, and sold branded apparel. Trink, who had no esports background when he became Faze’s CEO in 2018, aimed to position it as a youth-oriented culture and lifestyle company. “We are the voice of this current gaming generation,” he said on an episode of The Vergecast in 2019, during which he also compared his company to the rise of hip-hop. The firm was valued at close to $1 billion near the end of 2021.
But Faze Clan has faced large losses under Trink’s leadership, including a reported $48.7 million from operations last year, per Bloomberg. Shares have plummeted to 18 cents from over $20. By the end of 2021 (the year when Trink began floating the idea, internally, of taking the company public), Faze Clan had more than $70 million in debt. Most of its teams have been reported to be unprofitable, and in 2023 alone, it has announced two rounds of layoffs.
Seven former employees who spoke to Bloomberg described “a mismanaged organization marked by poor spending decisions, excessive pay and expansion into unprofitable categories like esports.” Notably, the company rented a series of luxury properties that incurred costs as high as $60,000 per month. Trink “took FaZe’s influencers to fancy Los Angeles steakhouses and wore a diamond-encrusted necklace featuring FaZe’s “F” logo,” the employees said.
Faze Clan’s employees have also been embroiled in a number of other controversies in recent years. Most notably, the company drew criticism over its contract work with English YouTuber Sam Pepper, who has faced multiple accusations of sexual harassment. Incidents involving Pepper have made it more difficult for the company to attract sponsors, a source “with knowledge of the company’s sales” told Bloomberg.
Esports, a sector that traditionally relies on sponsorships for its revenue, has seen significant declines in the past few years as advertising budgets tighten. Multiple companies across the industry have made cuts. Earlier this summer, Activision Blizzard laid off around 50 employees in its esports department. “I can only speculate that Activision Blizzard is closing its esports division,” one terminated employee told
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