Takeaways From Recent ESL FACEIT Group Town Hall

ESL FACEIT Group co-CEOs lay out future following staff cuts in February 2024

At a town hall meeting hosted by ESL FACEIT Group (EFG) last week, Co-CEOs Craig Levine and Niccolo Maisto laid out what the future would look like after the company announced it would cut around 15% of its global workforce (sources tell The Esports Advocate that this equates to around 250 – 300 affected employees).

The link to the town hall meeting for employees—provided to esports journalist Richard Lewis by a source—was first published via his newsletter. TEA viewed the meeting as it occurred on Friday.

In the roughly 15 minute long meeting, Levine and Maisto revealed some interesting information about the internal workings of the company that might not be publicly known.

First, the most interesting thing we learned is that Vindex has been shut down, as all of its assets including Esports Engine have been fully integrated into the EFG ecosystem. EFG acquired Vindex and its subsidiary Esports Engine on March 1, 2023. Vindex had been working on an analytics product, but the more valuable part of the company was Esports Engine, which was founded by former Activision Blizzard executives that were hired by the publisher after it acquired Major League Gaming (another company they founded). While it is unclear what happened to that analytics product, the plan was always to fully integrate the acquisition into the ESL ecosystem. 

Levine on integrating Esports Engine and sunsetting Vindex: 

“We’re working on a better internal decision making matrix to ensure more clarity and better accountability for how we work. But all of this only works if we come together as one EFG; you’ll hear more about the work to unite with a shared culture and one that we could all be proud of in the coming town halls. It’s already been underway, and a key piece of today’s updates is the formal completion of the Vindex and Esports Engine integration into EFG with one unified team that I just described. 

While we’ve already consolidated IT systems like Slack and GSuite migrations, we’ve now formally mapped and consolidated departments and key going forward leaders. We have one unified approach to publisher and industry stakeholders, and as mentioned, have retained the Esports Engine brand and have already sunsetted Vindex. There’s still plenty of work to be done to operationalize these changes with titles, reporting lines, and workflows with our colleagues formerly of Esports Engine. But there’s already been an incredible amount of work that’s been done; more on this and divisional town halls that will be scheduled throughout this week.” 

It was also revealed by Levine during the meeting that Dreamhack Sports Games has also been shut down. The division was launched in 2019 to focus on producing esports events and competitions with a keen focus on sports games.

“We’ve done the work through all of this to build a clearer global operating model to help us deliver our vision, and our business goals. Across our esports business, we’ve thought about studio footprints with clearer identities. We’re prioritizing key growth aspects of our digital platform and technology divisions. We’ve embarked on a commercial transformation to best deliver for our communities and for our partners. And we’ve built global service centers now with finance, HR, legal, and data. In addition to having the best people in the industry, we also have the strongest portfolio of brands to serve our stakeholders. We have, FACEIT, Esports Engine, DreamHack, and ESL and today, now are officially sunsetting DreamHack Sports Games brand, as sports games has already been integrated within esports. While this is a big step in the organizational transformation, there’s still more work to be done to standardize our global workflows and adopt best in class processes. “

Further, Maisto revealed that around 1,200 employees remain following the layoffs, and that the company is not currently profitable, though he believes these cuts and changes within the organization will lead to profitability as early as next year. The main thrust of the recent layoffs was to streamline the company and focus its activities with an eye towards hitting profitability by early 2025, according to Maisto:

“The decision to part ways with our colleagues today was not an easy one amongst those impacted, [and] were friends that we’ve been building the company with for over a decade now. That said, this was needed for the company to be best positioned to navigate the dynamic environment that Craig talked about a few minutes ago, but don’t think of today simply as downsizing. Think of today as part of a transformation, a transformation that we started a year and a half ago, and that ultimately will enable us to achieve our goals in a sustainable way. Today’s events are contributing in a significant way to the overarching goal of reaching profitability, and they’re putting us on a clear path together and potentially to get there [as] early as next year. At the same time, we’re sitting in a unique position to deliver our future growth plans with over 1200 of us remaining.“

Later in the meeting, while answering questions on why the leadership team landed on cutting 15% of its workforce, Maisto acknowledged that the cuts were north of that number in reality and also said that there are no future plans to make further cuts in staff. 

“The first one, why 15%? We tried to limit this as much as we could. You might have noticed in the business over the last year, basically, we started slowing down on hiring quite significantly in the second half of last year and quite significantly when it comes to 2024 as well. That was because we realized what was happening within the industry. I think we talked to it and about it, quite a few times in past town halls, and we started readjusting the trajectory of the business. 

“So if you look at it, compared to our plans, this is actually way more than 15%. Thankfully, we’ve been growing throughout this process as well, and that’s what is limiting this when it comes to, ‘are we gonna do this?’ Again, I don’t think we have any plans to do a similar reduction, [a] similar exercise, in future, and the whole idea was to limit this, as much as possible, to a one-off event.” 

Finally, while it has long been assumed that EFG was working on the Esports World Cup, the company has never publicly stated (as far as we know) that it has been doing a lot of the heavy lifting for the event over the last year or so. From Maisto:

“The second goal is to leverage the industry defining events that are happening in KSA [Kingdom of Saudi Arabia] to secure EFG’s global leadership position. Over the last year, we’ve invested a lot in our capabilities to deliver EWC [Esports World Cup] and to leverage it globally. Nothing we’ve been doing today impacts credibility and we remain committed to deliver on that strategy.”  

More details on the meeting can be found in Richard Lewis’ newsletter, where the video is still available for viewing, as of this writing.