The Esports Advocate has learned from multiple sources familiar with the situation (who asked not to be identified for fear of retaliation or because they were not authorized to speak on the matter) that Dubai-based esports and transmedia company Galaxy Racer laid off five employees in June from its North American division, Her Galaxy. (A Galaxy Racer rep, says that only two were employees and that the other three way contractors).
In case you are not familiar with it, Her Galaxy was officially launched on March 1, 2022, and its mission statement is to facilitate grassroots competitions in North America specifically designed to give much-needed opportunities for women and those that identify as women, in esports.
Layoffs in June
According to multiple sources, five people were laid off between June 19 – 23—and all of those affected are women. Layoffs during that week were described to us as abrupt and without notice. There also didn’t seem to be any reasoned decision on how layoff targets were selected, as all five women were high-performing employees, according to our sources, that were actually generating some revenue for the company (a Galaxy Racer rep. claims that two of those affected generated $0 revenue for the company. They also claim that these employees were from Talent & Sales divisions and not Her Galaxy). While it was probably not intended to fire these employees because they were women, whoever made these decisions may not have taken into account the optics of these cuts, according to multiple sources.
Currently, around 10 – 12 employees remain at Her Galaxy, and as of this writing, all of them are owed back pay. Sources we spoke to said that a lack of communication with Galaxy Racer HQ in Dubai has been an ongoing and persistent issue, and in 2023 late pay caused an undue strain on employees.
Despite those challenges, the team at Her Galaxy managed to put together a successful Apex Legends event at the end of June that featured participation from 60+ players, was well-received by fans, and strengthened the relationship between stakeholder Electronic Arts and Her Galaxy.
Following the layoffs in June and the completion of the Apex Legends tournament, HQ decided that a Rocket League event that had long been advertised and set to launch in July, would be put on hold. In fact, at the end of the Apex Legends Finals, Her Galaxy noted in its broadcast that details on the Rocket League event would be announced “soon,” but that never happened.
Sources tell TEA that this decision was particularly disconcerting because a lot of work went into facilitating this competition to launch in July, including negotiations to secure licensing rights with Epic Games, securing a venue for the LAN event final in September, and the creation of media and marketing materials. As of this writing, the event has not been “canceled” but has been put on hold for the time being—likely to be dealt with following the company’s merger with RTE (more on that later).
In late-May to early-June, Galaxy Racer HQ hired a third party to handle HR for Her Galaxy. Employees hoped that having someone to liaise between North America and HQ would alleviate ongoing problems such as late payments, the lack of communication, and establishing benefits like 401K and healthcare plans. Instead, sources say that HR mostly served as an extension of HQ, did not improve communication, and seemed ineffective in getting employees paid on time. In addition, the one major thing that HR did was initiate the execution of the layoffs in June.
Ongoing, Delayed Payments
As of this writing, Galaxy Racer HQ is five weeks behind on pay to Her Galaxy employees. When the company last paid employees in June, it caught up on back payments, but did not take care of invoices for the month. Sources TEA spoke to outside of North America describe similar situations, with some employees stuck on a treadmill of waiting weeks or even months to be paid.
In recent months, Galaxy Racer would often cite its ongoing merger with Dubai-based transmedia company Rivea Technology and Entertainment Limited (RTE) as the reason why employees weren’t getting paid on time. In May, RTE announced that it had signed a letter of intent (a non-binding term sheet) to acquire the shares it did not “already own” in Galaxy Racer.
We asked all of our sources why the team at Her Galaxy was still there, despite not being paid on time, the alleged lack of communication from Galaxy Racer HQ, and the recent slate of layoffs in June. The answer? They all believed in the organization’s mission statement of providing opportunities in esports for women and marginalized genders. But with the Apex Legends event complete and the Rocket League competition on hold—for now–many on the team are considering resigning and moving on, according to sources.
Galaxy Racer’s Response
TEA reached out to Galaxy Racer Global Chief of Staff Walid Singer (who our sources say is the main point of contact at Galaxy Racer HQ for North American employees), and CEO Paul Roy.
A spokesperson for Galaxy Racer responded to our request for comments via email on Friday afternoon and addressed our questions point-by-point. For the most part, the company spokesperson refuted much of our reporting.
On the company laying off only women in June, the spokesperson said:
On a group level, we are in the process of completing a very large corporate reorganization which, by its very nature, may change many aspects of our business. The changes include employee restructures and improvement of business strategies.
GXR NA is split into two main divisions, Talent/Sales of Galaxy Racer NA & Her Galaxy. The terminations are solely focused on the Talent and Sales side of the business rather than the Her Galaxy tournament side of our business. These terminations were solely based on performance and not on gender. We have not and will never discriminate or make decisions based on gender only. In fact, all of our new hires are women joining our team.
At Galaxy Racer and Her Galaxy we stand for equality, diversity, and inclusion. We are and have always been one of the first organizations in the world to have invested into female esports globally. Our entire efforts in North America are focused around Women Identifying Athletes.
On owing employees five weeks’ worth of back pay:
There is a delay of four weeks that has occurred on the bi-monthly pay cycle from June 15th as a result of many factors.
- The reorganization transaction taking place globally.
- Two major holidays coinciding one after the other. One in the MENA region and one in the U.S.causing banking transaction delays.
The team will be caught up in payment by next week. All of this has been thoroughly communicated to our team.
On if the long-advertised $100K USD Rocket League event has been canceled or postponed (it was supposed to start this month):
Our previous two tournaments were an absolute success with over 15,000 Average CCVs and an incredibly well organized broadcast and management of operation. We have decided to slightly postpone Rocket League [until] the Fall season so that we can consider all of the feedback and work on creating an even more successful continuation to Her Galaxy.
Finally, on the issue of a lack of communication between its North American operations and Galaxy Racer in Dubai, the spokesperson said:
Absolutely untrue. We are in constant communication with the various team members in NA. As we continue to grow and shift our focus, we will continue to bring on the best team in North America.
Editor’s note: In the interest of fairness, additional comments from a Galaxy Racer rep. were added to this article after publication. IT should also be noted that an earlier iteration of this story (based on what multiple sources told us separately) we reported that the former CEO of the North American division was fired, but we later learned that they were transitioned into a different role after establishing the North American office, and therefore we made corrections and removed some texts in the interest of fairness to them.