Gfinity Initiates Strategic Restructure to Reduce $10M Annual Costs
- Esports provider Gfinity undertook a strategic review resulting in several efforts to reduce its annual cost base of £8.5M GPB ($10M USD) by more than 60%.
- Garry Cook (executive chairman) and Graham Wallace (CEO) stepped down from their positions and have been replaced by Neville Upton (chairman) and John Clarke (CEO).
- Gfinity committed to focusing on three core areas of business: its own community, building communities for others, and motorsports.
Earlier this week, esports provider Gfinity announced that it has undertaken a strategic review resulting in several efforts to reduce its annual cost base of £8.5M ($10M). The company will report its interim earnings for 2019/2020 on March 23, and expects to reveal an adjusted operating loss of £2.4M ($2.8M) as well as revenues of approximately £3.5M ($4.1M) for the six months period ended Dec. 31.
As part of Gfinity’s cost reduction program, Executive Chairman Garry Cook and CEO Graham Wallace stood down from their positions on the board and management team. Both will maintain a relationship with the Gfinity as they continue to work on several investment and commercial opportunities for the business. In their places, the company appointed John Clarke, former global commercial and brand officer, as CEO; and Neville Upton, president and co-founder of Gfinity, as chairman.
Furthermore, the company committed to adopting a flexible variable cost operating model and focusing on three core areas: its own community, building communities for others, and motorsports (with Formula One as its anchor client). Consequently, Gfinity decided to exit all other areas, including low margin tournament operations, which had a negative impact on cash.
Through its restructuring, Gfinity is looking to reduce its annual cost base by more than 60% from its current level of £8.5M ($10M).
Gfinity’s strategic situation was complicated by the recent impact of the global outbreak of respiratory disease caused by a novel coronavirus (COVID-19), which resulted in fewer commercial opportunities than the company’s management expected. Also because of this situation, two events organized by Gfinity that were due to take place before July have been postponed.
In reaction to the financial repercussions, the company’s management announced that it is pursuing other options for financing in the short term and continues its discussions with several potential strategic investors.
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