Esports Layoffs 2023: The impact of the recession has finally made its way to the esports industry, as it joins the long list of businesses that are facing mass layoffs and shutdowns. The severity of the situation has left industry insiders and outsiders perplexed and scrambling for answers. In this article, we explore the reasons behind the crisis and its consequences.
Why are Esports Companies Facing Layoffs and Shutdowns?
The year 2023 has been particularly brutal for the esports industry, as it struggles to weather the storm caused by the global economic meltdown. According to reports, the industry is facing three main challenges:
Sponsors dropping out: Although esports companies were able to establish viable businesses, turning a profit has proved to be a daunting task. As other industries feel the effects of the recession, several sponsors are dropping out, significantly reducing the earnings of esports organizations. Without advertising money, these companies are left with little to work with.
Overhiring: The gaming and esports industry experienced explosive growth during the pandemic, resulting in an abundance of job opportunities. However, as the industry growth slows down, many of these positions are now deemed unnecessary, leading to layoffs.
Investors losing confidence: Top venture capitalists and investing groups have lost faith in esports, and as a result, are stepping back from investing in the industry. This loss of funding has had a significant impact on esports companies’ operational expenses.
Examples of Companies and Detailed Info
The economic meltdown has hit several top esports organizations hard in 2023. Here are a few examples:
This organization has let go of all content, social, and talent teams. Some personnel were reportedly fired within days of being hired, and it has been confirmed that the owner is looking to sell their Overwatch and Call of Duty franchises.
A well-known organization from North America and Europe, eUnited has let go of all their teams and staff across all levels. The CEO is reportedly the only remaining employee.
As the first esports organization to go public, FaZe Clan’s stock price has plummeted, putting them at risk of being delisted. As a result, they have laid off 20% of their staff across all levels.
While this organization has done well in recent times, they have laid off staff in sales, marketing, content, and human resources, including senior positions such as chief revenue officer, director of people, director of talent, and head of partnerships.
Staff from the social media team to those heading the Esports Management department were laid off in this organization. While the exact number of employees let go is unknown, many of them had been with the organization for several years.
Several employees were laid off in this organization, but it is unclear which areas were affected, and how many people lost their jobs. According to LinkedIn, there are several vacancies across different roles in the organization.
The timing of the 46 layoffs at Riot Games has raised doubts about the company’s claim of a “strategic shift”. The layoffs affected members of human resources, recruitment, support, and esports divisions.
Consequences of the Layoffs and Shutdowns
The repercussions of the layoffs and shutdowns are dire, and the future of the esports industry is uncertain. Without investors and sponsors backing esports organizations, the industry risks going back to its previous status as a mere recreational activity instead of a billion-dollar industry. The volatility of the industry may also make it challenging to attract professionals, even if the situation improves in the coming months.
Only time will tell what becomes of the esports industry, but for now, the outlook is uncertain and worrisome. The recent layoffs and shutdowns of top esports organizations have sent shockwaves throughout the industry, raising questions about its long-term viability.
It’s clear that the recession has hit the esports industry hard, as sponsors drop out, investors lose confidence, and companies overhire in response to initial success. While the pandemic provided a temporary boost to the industry, the economic fallout from the pandemic has only exacerbated existing problems.
Despite the challenges, there is still hope for the esports industry. As economies recover and stabilize, it’s possible that investors and sponsors will return to the industry, providing much-needed funding and stability. Additionally, companies can take steps to avoid overhiring and ensure that their workforce is lean and efficient.
Overall, the esports industry is at a crossroads, with its future uncertain. But for those who are passionate about esports and gaming, there is still reason to be optimistic. As always, the industry will continue to evolve and adapt to changing circumstances, and we can only hope that it emerges from this crisis stronger and more resilient than ever.
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