Opinion: Merch Reveals and Mass Layoffs Don’t Mix

Pictured: 100 Thieves elite showing off a new jersey design. Credit: 100 Thieves

Let me preface this by saying that I don’t think anyone who has to make the difficult decision of letting an employee go takes any joy from it. These are hard decisions that have to be made, and no one should judge the decision-makers for doing what is necessary to avoid going out of business. However, some esports companies’ approach to handling terrible, but necessary decisions in public illustrates a lack of crisis management experience.

As you’ve probably read everywhere this week, Los Angeles-based esports organization 100 Thieves laid off around 30 employees (you can catch up here). Twitter was abuzz with former employees announcing that they were out of work, but expressing sincere gratitude for the time they had spent at the organization. Matty Lee, who spent four and a half years at 100 Thieves in several roles including chief revenue officer and VP head of partnerships, expressed similar sentiments in a lengthy post on LinkedIn, noting:

“My cup overflows today and I can’t say enough great things about the last 4.5 years, the lifelong friendships, and all that other mushy stuff. For now, I’m going to seek out some powder up in the mountains and unplug for a bit. When I get back, I’m going to start looking at opportunities in NYC, LA, and possibly beyond.”

But on the same day as people were saying “I have been laid off from 100 Thieves” the organization celebrated one of its co-owners (Rachel “Valkyrae” Hofstetter is doing voice work for the upcoming Sonic game, Sonic Prime) and a newly redesigned jersey (pictured above, and being worn by company’s leaders). The timing of these announcements was less than optimal and many in the community took the company to task for what seemed to be intentional insensitivity about what was going on around them.

I don’t think these announcements coinciding with a bunch of layoffs were intentional at all—it all felt just sort of like dumb luck/bad timing or a combination of both to me—but 100 Thieves unintentionally gave the impression that it was business as usual. Many in the community also felt like 100 Thieves management made a real mistake when it didn’t express some sort of public display of sympathy.

Later, 100 Thieves President and COO John Robinson would take to Reddit (thanks Esports Insider), where he would write the following:

“Tough day today for us, we needed to downsize the organization a little bit. We’re in a challenging economic climate and like all sports (and esports) organizations, sponsorships [are] a major part of our business. Juvee and Higround are healthy and growing but partnerships [are] still our biggest source of revenue – the support of our sponsors pays for all our esports and content and a lot of the fun stuff we get to do. We have a new CRO joining tomorrow and have a lot of strong new partners in our pipeline. More than ever, we appreciate all the support for the org, our staff, and our sponsors.”

This was a good step in sincerely expressing something about all of these layoffs, but there was one thing in Robinson’s statement that caught my eye: “We have a new CRO joining tomorrow…”

This was surprising. Why would 100 Thieves fire and then rehire a brand new CRO after letting Matty Lee go? I tried to ask Robison questions about this multiple times this week but he has not responded. I asked what he thought about the optics (of those announcements) over the last few days and why the company would replace a CRO that had been in the position for four and a half years and by all accounts was doing a good job. The conclusions without the benefit of Robinson’s insight is that it might be an effort to cut costs, that Lee did something wrong (which I know is not the case), the company needed fresh blood to create new sales opportunities, or investors were unhappy with declining sponsorship revenue and asked for him to be replaced.

Further, the statement doesn’t talk about the elephant in the room, the thing that has changed spending dramatically at 100 Thieves over the last year: the game it is developing. Are game development costs, coupled with a turbulent economy and diminishing returns on sponsorships/partnerships deals and other revenue streams, creating an atmosphere where layoffs are the topline option—or is game development proving to be a deep dark abyss milking its funds dry?

More to the point, would I be asking most of these questions if companies such as eUnited, 100 Thieves, RESPAWN Products, Evil Geniuses, etc. announced these layoffs or issued a statement to the media? The answer is an emphatic no. But privately-owned companies seem to be using the same playbook: lay people off, rely on the fact that they signed a non-disclosure or non-compete agreement, and keep quiet about it in the hopes that no one will fully uncover the depth and the breadth of these layoffs.

Those efforts to hide the truth are all futile, of course. Those of us who cover this industry for a living will find out, talk to people who know something, we’ll scour every platform to find the missing pieces, and then we’ll put it all together so that the public knows. Just as we wrote about the good times (amazing investments, collaborations with celebrities, brand-name sponsorships, championship wins, and more), we are obligated to write about the bad times too.

In closing, other organizations that have to make these hard decisions this year should stop trying to hide it and just pull the bandaid off. My advice: tell the public what you had to do (and if you want to, why you had to do it), and detail what help and support you are capable of providing to get people on the path to a new job. That’s it. I know that privately owned companies are not required by law to report workforce reductions, but it’s the decent thing to do, and it’s less of a hit on your reputation in the long run.

Note: This article first appeared in The Fudge Retort newsletter on Jan. 13, 2022.