Enthusiast Gaming Lays Off 25% of Staff, Following Multiple Cuts Last Year

The video game publisher and media company Enthusiast Gaming laid off 25% of its workforce—around 45 employees—today, its third round of cuts in 12 months following headcount reductions in May and December. The affected staff were notified of the layoffs via email rather than direct conversations due to the volume of impacted employees, according to an email obtained by ADWEEK. Laid-off staff interested in more information were invited to schedule 1:1 time with the human resources team via Calendly. A representative for the company confirmed the news. “The gaming, media and wider technology landscape continues to be in a state of flux, with many industry organizations taking actions to consolidate operations or adapt organizational strategies to meet the new market realities,” according to a company representative. “Today, Enthusiast Gaming similarly undertook a strategic cost reduction program after a thorough organizational review, a part of which included the net reduction of approximately 25% of Enthusiast’s workforce.” The cuts come amid a larger wave of layoffs, cutbacks and closures sweeping the media industry. In the first two months of the year, publishers including The Los Angeles Times, Wall Street Journal, Time, Bustle Digital Group and others have reduced the size of their workforce. Enthusiast Gaming Lays Off Almost 10% of Staff As Revenues Slip Enthusiast Gaming struggles to achieve profitability Enthusiast Gaming generates the vast majority of its revenue through advertising, but it has struggled in recent quarters to turn a profit, according to public filings. The company, which went public in 2018, is composed of a portfolio of video game publishers, gaming sites, a creator network and an experiential portfolio. It generates advertising revenue primarily through programmatic inventory across its portfolio of websites, its video network and YouTube channels. In its most recent quarter, the company brought in $45.6 million in revenue—a decrease of 10% compared to the same period last year—and posted a loss of $59 million, according to public filings. Nearly 90% of its revenue ($39.8 million) in the quarter came from advertising, with the remainder coming from its esports and entertainment division ($2 million) and subscription offering ($3.7 million). In 2022, it generated $202 million in total revenue but posted a net loss of $76 million. In October, the company voluntarily delisted itself from the Nasdaq, a move expected to produce an annual cost savings of $2 million, according to the company. It will still trade on the Toronto Stock Exchange. The company is due to report its Q4 earnings later this month. Executive shuffle The company hired seasoned executive Nick Brien as its chief executive officer in March, who joined Enthusiast Gaming following leadership roles at ad-tech firm Amobee and Dentsu. Brien left the company in January and was replaced in an interim capacity by Adrian Montgomery, the current chairman of the board and previous CEO. In January 2022, four vice-president-level executives at Enthusiast Gaming wrote a letter to the board requesting that Montgomery step down from the CEO position, according to The Washington Post. In the letter, the group cites failures around strategic planning and equity distribution, as well as issues relating to staffing the human resources department, as threats to the Enthusiast Gaming business. In November, it hired Felicia DellaFortuna as its new chief financial officer. DellaFortuna joined the company following an eight-year tenure at BuzzFeed Inc., which recently laid off 16% of its staff as part of its sale of Complex Media. In the last month, chief product officer Shinggo Lu, chief technology officer Alan Liang and chief content officer Roarke Boes also left the company, according to a person familiar with the matter. “While we know that change can be challenging,” the internal memo said, “we believe that this strategic restructuring is a necessary step to secure our position as a leader in the industry and create long-term value for our stakeholders.”