ESL FACEIT Group (EFG) is downsizing its workforce at the Burbank, California, office of its subsidiary, Esports Engine. According to The Esports Advocate, employees received official notifications regarding the layoffs, with one group being informed of their dismissal and another invited to a general meeting.
The Burbank office currently houses between 20 and 30 employees. While a small team will remain, it remains unclear whether they will be relocated to Esports Engine’s primary office in Ohio or continue operations in California. The restructuring signals a significant shift in the company’s strategic direction.
A Part of a Larger Restructuring Plan
The job cuts at Esports Engine’s Burbank office are part of a broader workforce reduction initiative. In March 2024, ESL FACEIT Group announced a 15% cut in its global workforce, translating to approximately 250-300 employees losing their jobs. The restructuring also includes the closure of several business units, such as DreamHack Sports Games and the analytics platform Vindex.
These measures highlight EFG’s efforts to streamline operations and focus on core business areas, particularly as the esports industry faces economic challenges and shifting market dynamics.
Financial Pressure from Savvy Games Group
The Role of Saudi Investment
Insiders suggest that the financial strain stems from directives issued by Savvy Games Group, the parent company of ESL FACEIT Group. Savvy Games Group is owned by the Saudi Arabian government’s Public Investment Fund (PIF), which has made significant investments in the esports sector. Reports indicate that the PIF expects EFG to achieve profitability by the end of 2024, prompting aggressive cost-cutting measures.
Cost-Cutting Measures and Future Implications
To meet financial targets, EFG has undertaken workforce reductions, business unit closures, and other cost-saving measures. These actions reflect a growing trend in the esports industry, where many organizations are restructuring in response to economic downturns, lower sponsorship revenues, and shifting audience engagement.
While ESL FACEIT Group remains a major player in the esports ecosystem, the ongoing restructuring raises questions about its long-term vision. Analysts speculate whether further cost-cutting measures will be necessary and how this shift will impact the company’s ability to host and manage large-scale esports events.
The Future of Esports Engine
Esports Engine, founded by key industry veterans, has been instrumental in organizing major esports tournaments and events. With the latest downsizing efforts, the company’s future role within the EFG framework remains uncertain.
If key personnel are relocated to Ohio, it could signal a centralization strategy aimed at consolidating operations under one roof. However, if remaining employees continue working from Burbank, the company may adopt a hybrid operational model to maintain a presence on the West Coast.
Conclusion
The layoffs at Esports Engine’s Burbank office mark another major shift in the esports industry’s evolving landscape. As EFG navigates financial pressures and restructures its global operations, the company faces a critical period that could redefine its competitive positioning. Whether these measures will successfully drive profitability or lead to further cutbacks remains to be seen.
