Motorsport Games to reduce workforce by 40%

In a regulatory filing, Motorsport Games determined to implement additional measures to continue to bring down its year-over-year operating expense through a reduction of the company’s workforce primarily in Australia and the United Kingdom by approximately 38 employees. The workforce reduction is expected to impact approximately 40% of the company’s employees worldwide. The company expects to record a restructuring charge related to the workforce reduction, primarily consisting of severance and redundancy costs, in a preliminary estimated range of $0.4M to $0.5M. The company expects to recognize and pay out the majority of the restructuring charge in the fourth quarter of fiscal year 2023. The company further anticipates the implementation of the workforce reduction, including cash payments, will be substantially complete by the end of the fourth quarter of fiscal year 2023. The workforce reduction is subject to legal requirements in Australia and the United Kingdom, which may extend this process beyond the fourth quarter of fiscal year 2023 in certain cases. The charges that the company expects to incur are subject to a number of assumptions, including legal requirements in primarily the Australia and the United Kingdom jurisdictions, and the actual restructuring charge may differ materially from the estimated range disclosed above.