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“When times are good, you just throw headcount at it,” says one big name gambling CEO when asked what the hell is going on.


Why is everyone being laid off?

Gambling companies are often hot on the heels of leading tech companies when it comes to following the latest trends and developments. Only this time, the trend is a negative one.

Amazon is intending to lay off 18,000 workers. Twitter, Microsoft, Google and every Silicon Valley darling you can think of have also cut staff over the last six months. Flutter Entertainment, Hero Gaming, PressEnter and Genesis Global are just a handful of gambling firms to have followed suit.

This “trimming of the fat” is primarily because digital companies exploded during the Covid-19 pandemic and had to significantly increase headcount to meet customer demand.

Now that demand has dried up because people have gone back out into the real world. At the same time, the economy is putting a squeeze on everything and the light at the end of the tunnel looks likely to be a train.

During the depths of the pandemic, iGaming NEXT has learned that some gambling companies would hoard developers. Talented tech staff are few and far between, so if one became available, they would get snapped up for a rainy day, even if they were surplus to requirements at the time.

Such a frivolous approach has become harder to justify. With that said, leading online betting and gaming recruitment agency Pentasia insists recent high-profile tech layoffs have not affected the global demand for tech talent.

Is demand up or down?

Intensity and competition have actually increased, if anything: “As the fear of missing out on talent grips the market, we see clients adopting a more streamlined approach to hiring,” said Pentasia in a January Talent Market Update.

“Gone are the days of four to five stages. We’re now seeing jobs offered after just one interview. While this is still uncommon, two or three interviews is the sweet spot for securing a role.”

Tech roles are likely to be the most secure, then, but almost all others are under careful consideration because for once, gambling firms are feeling the strain. Once considered recession proof – and then recession resilient – their online gaming armour appears weaker by the day.

For public companies, investors take a magnifying glass to every penny spent and demand an explanation. For private companies, shedding staff is sometimes required simply to stay afloat.

Former Bally’s CEO Lee Fenton was the first iGaming executive to say the quiet part out loud.

When the Bally Bet operator slashed 15% of its US digital division workforce amid mounting losses, Fenton said: “The pandemic boosted our business and we continued to hire at full pelt. I now can see that we may have over hired in some areas, and I take full responsibility for that.”

While job losses undoubtedly come at a great human cost, investors often look favourably upon them. It shows that companies are taking their spring cleaning seriously as they look to get the balance sheet in order before results day. We are currently in the depths of Q4 season, don’t forget.

The best example of this recently was DraftKings. The US operator – which is second for market share in the US behind FanDuel having lost more than $3.5bn on OSB to date – sacked 140 employees in January. Its share price duly soared by 10%.

There is no room for sympathy on the stock market.

Ben Fried, head of betting and gaming at global executive search firm SRI, has been following this trend for a while. “A lot of these companies ramped up because demand through the pandemic had gone up as they were adapting to new market realities,” Fried tells iGaming NEXT. His favoured example is one outside of gaming, with online car retailer Cazoo.

Cazoo was convinced it had conquered the market by promising to deliver new cars direct to customer doorsteps. But then the dealerships reopened, and it became clear that people wanted to drive a car before buying one. Who knew?

The cost of consolidation

Over hiring is not the only factor that has caused these gambling companies to swell. Consolidation is a constant in our industry. Every time a deal completes, there is a risk that two people are employed for one job. Something has to give, although that hasn’t always been the case, according to Fried.

When Flutter Entertainment set out to become the biggest corporate bookmaker in the UK by swallowing up the likes of Sky Bet and Paddy Power Betfair, each brand had its own CEO and continued to operate almost as separate entities.

Fried – a former Betfair manager himself – thinks back to that time: “I said aren’t you going to synergise the business? I was told there was no immediate need as they were growing and making money, so there was no need to create these cost synergies.

“I think the problem is that has now changed,” he adds.

And it has changed quite significantly. Flutter was arguably ahead of the curve on this topic. As exclusively reported by iGaming NEXT last summer, the operator committed to making sizeable redundancies across its UK & Ireland division following an internal review. Was the writing on the wall?

Clear Edge Malta’s Luke Imeson: “There are more candidates available with recent redundancies, but companies are more hesitant to hire.”

The operator said the UK’s operating landscape had changed by such a degree that it was forced to respond to the “more challenging” external environment. “Now they’ve created a more streamlined and efficient structure as far as I understand it,” says Fried.

The recent combination of 888 and William Hill has created similar unrest. The joining of two culturally opposed leadership teams (one online Israel and the other retail UK) means there are not only two people vying for one position, but also two vastly different executional management styles. Potentially a case of too many cooks in the kitchen?

888 made a host of cuts across its Israeli tech office a matter of weeks before CEO Itai Pazner was ousted for very different reasons, while Ulrik Bengtsson, the last permanent CEO of William Hill, departed before the deal was done.

“Those people will look very good on paper,” says Fried, commenting on the casualties. Indeed, the CEO at the top of this piece can attest to that. A leading recruitment specialist told him recently that he has never seen so many C-level CVs on the market.

“Even when we put out roles now, we get super senior CVs sent to us on mass,” says the anonymous chief exec. “It is definitely shifting to become the employer’s market.”

Were gaming companies too trusting?

Another driver behind this “Covid correction” is that it arguably takes far longer for employers to realise their employees are not up to scratch in a remote or hybrid working environment. Was this easier to gauge while working alongside each other in an office? Are companies now paying the price for putting too much trust in some of their staff?

On this point, the majority of newcomers during the pandemic were hired with a specific job to do. What if those jobs have now been completed?

“I think some big companies have realised that a lot of these people they hired, they no longer need,” says Luke Imeson, iGaming business manager and director at Clear Edge Malta. “A lot of these tasks have already been fulfilled, whether it be creating a new product, launching a new brand, or entering new markets. They then have the perfect excuse [to get rid].”

Imeson, a former customer experience manager at William Hill, is more closely aligned with our secret CEO than he is with Pentasia. He says: “We’ve been in a massively candidate driven market over the last year. There have been a lot of jobs open and very few candidates available to choose from.

“Now we are in a situation where there are more candidates available with recent redundancies, but companies are more hesitant to hire,” he adds, before reiterating that iGaming is a highly robust industry.

So in conclusion, iGaming companies are hesitant to hire but trigger happy. This is a dangerous combination for employees, who now find themselves in an unusually precarious position.

As the power shifts back to our employers, we should ask one question. Does my contribution justify my salary?

If the answer to that question is no, then strap in, because 2023 could be a very bumpy ride.

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