Exclusive: Wisdom Gaming Cuts Staff in Fresh Round of Layoffs

Credit: Wisdom Gaming

The Esports Advocate has learned from multiple sources that Bloomington, Minnesota-based esports production company and tournament organizer Wisdom Gaming has initiated a round of layoffs this week.

Sources familiar with the situation tell TEA that approximately 17 people, or 40% of its workforce, have been let go. This week’s layoffs represent the fourth time since last summer that the company has made staffing cuts. A Wisdom spokesperson said that, while 17 people were laid off,”  they refuted that it was 40% of its total workforce,” saying that the number was inaccurate and incorrect.

In February, Wisdom shut down its subsidiary esports team, Torrent Esports, and released its players. At the time, the company said that it would move many of the employees associated with the organization to its studio operations, but sources say that months of planning prior to that announcement (intended to let the Torrent brand live on) were never ultimately implemented.

Prior to that, Wisdom laid off around 5 – 10 employees in November, which followed layoffs in the Summer of 2022 that saw 10 -15 people let go.

Somewhere in the neighborhood of 30 people remain at the company, according to multiple sources, though an exact figure is unknown as of this writing.

Sources tell TEA that the company is not providing any severance, job placement help, or other support to outgoing employees—which is in stark contrast to previous rounds where the company did provide some financial support for exiting employees.

Sadly, some remote employees were told a few months ago that they had to relocate to Wisdom’s headquarters to work in its office or risk losing their jobs. Now many of those same people find themselves unemployed and living in a new city.

Wisdom Gaming issued the following statement to TEA on Wednesday:

After a comprehensive evaluation process, Wisdom Gaming has developed a streamlined structure to better position itself as it continues to navigate a turbulent market. Unfortunately, this process results in several difficult but necessary organizational changes, including the elimination of 17 positions. As a startup, this reduction is felt deeply across the company, and we are forever grateful to those employees who have contributed to our mission of creating spaces where everyone can experience the joy of gaming.

On the plus side, sources told TEA that Wisdom Gaming is Riot Games’ production partner for the freshly announced Teamfight Tactics esports competition, the TFT Global LAN. The 512-person open bracket tournament timed for Set 10 that will take place in Las Vegas, Dec. 8-10 (see GamesBeat’s reporting on this for more details). A Wisdom spokesperson said that, while the company does support TFT esports, it is not involved in the aforementioned project in any way. Wisdom is also producing a Madden NFL 23 tournament to be held on June 3, with NFL players in cooperation with the Christian McCaffrey Foundation. The event will help raise funds for The Logan Project, a charity named after McCaffrey fan Logan Hale, who lost his battle with childhood cancer in 2021.

In addition to its tournament organizing and its white-label esports production business, Wisdom Gaming operates Wisdom Gaming Studios, an 18,000-square-foot esports venue and broadcast studio, on Level 4 of Mall of America, in Minneapolis (this also includes a bar and a lounge called The High Ground). Wisdom still has five part-time job openings at The High Ground posted. The space also serves as the home of the NBA organization Minnesota Timberwolves’ esports team: T-Wolves Gaming. Wisdom also operates high-school esports provider Minnesota Varsity League (MNVL) and Gold Rush, an organization that supports the Rocket League competitive scene.

Troubled Waters Ahead

Sources tell TEA that this latest round of layoffs, which was announced last week in an email to staff, is part of systemic mismanagement issues at the executive level of the company as it struggles to generate significant revenue.

Sources say that Wisdom Gaming’s hiring practices were nepotistic, which resulted in undue influence on business practices. Many people were hired based on friendships or romantic relationships with other Wisdom employees. Multiple sources corroborated that these hiring practices fostered a clique-like atmosphere that has created a canyon between management and the rest of the company. Sometimes that influence from individuals in upper management could undo previous decisions made by other departments simply with a single conversation with Zweigbaum.

Another problem sources spoke about was the leadership’s wasteful spending on things like a bar, a big office space, and even the decision to set up shop in the Mall of America. Much of the spending was not used to further the business or acquire clients and customers, sources told us.  A Wisdom spokesperson told TEA that the “location and HQ was always intended to be within Mall of America as the company pivoted from remote production post-pandemic .”

That questionable spending also extended to Torrent, which one source described as a fire barrel that money was being thrown into at a time when esports teams were struggling to survive.

Sources also tell TEA that the tenure of former Wisdom President Steve LaCroix, who left in March, was both problematic and invisible at times to the rank and file. LaCroix, a former executive VP at the Minnesota Vikings, struggled to understand the gaming audience and how to apply his knowledge of marketing, sales, and sponsorships to Wisdom’s business. Further, many employees didn’t know what LaCroix was doing as a leader, and the only time his presence was really felt was when he was conducting a company-wide restructure that almost always led to more staff cuts. LaCroix was not alone, they say; many of Wisdom’s hires allegedly either didn’t understand Wisdom’s target audience or business model.

All of this illustrates why Wisdom Gaming is facing a serious crisis; sources say that if the company does not find a fresh injection of capital soon, it could be out of business or bankrupt within a few months. Given the current view of esports amongst venture capitalists and the state of the economy, Wisdom has a steep hill to climb.

Editor’s note:  The story has been updated with comments from Wisdom Gaming, given to TEA on Wednesday – those comments have been added throughout the article. In addition, a correction was added about Wisdom Gaming’s space at the Mall of America.

On Tuesday, we erroneously reported that the layoffs were announced in an all-hands meeting last week, but the news was actually delivered through an email to staff. We apologize for the error and have corrected our story to reflect this.