Faze Clan, a merchandising and influencer marketing agency that was once synonymous with the esports space, has fired its CEO Lee Trink. CFO Christoph Pachler will succeed Trink on an interim basis, Bloomberg reports.
Faze Clan cultivated a lavish and free-spirited image during its early years. The company has 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 experience in esports when he became CEO of Faze in 2018, aimed to position it as a company focused on youth culture and lifestyle. “We are the voice of this current generation of gamers,” he said in an episode of The Vergecast in 2019, during which he also compared his company to the rise of hip-hop. The company was valued at nearly $1 billion towards the end of 2021.
But Faze Clan suffered significant losses under Trink’s leadership, including $48.7 million in operating losses last year, according to Bloomberg. Shares fell more than $20 to 18 cents. At the end of 2021 (the year Trink began floating the idea, internally, of taking the company public), Faze Clan had over $70 million in debt. Most of its teams are reportedly unprofitable, and in 2023 alone it announced two rounds of layoffs.
Seven former employees who spoke to Bloomberg described “a poorly managed organization marked by poor spending decisions, excessive salaries, and expansion into unprofitable categories like esports.” Notably, the company rented a series of luxury properties that cost up to $60,000 per month. Trink “took FaZe influencers to Los Angeles steakhouses and wore a diamond-encrusted necklace emblazoned with FaZe’s ‘F’ logo,” employees said.
Faze Clan employees have also been involved in a number of other controversies in recent years. The company was notably criticized for its employment contract with English YouTuber Sam Pepper, who has faced multiple accusations of sexual harassment. The incidents involving Pepper have made it more difficult for the company to attract sponsors, said a source “with knowledge of the company’s sales.” Bloomberg.
Esports, a sector that has traditionally relied on sponsorship for revenue, has seen significant declines in recent years as advertising budgets have tightened. Several companies in the sector have made reductions. 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,” said one laid-off employee. The edge at the time.