Analysis: Settling for less (Part 1)
Former Paddy Power COO Breon Corcoran joined Betfair as its chief executive in August 2012. Since then, he has implemented a number of changes " including a raft of layoffs. Tom Victor takes a look at what has happened at the firm since Corcoran took over.
Even before Breon Corcoran took the reins at Betfair, it was evident that changes would be made under the former Paddy Power COO.
Things had been set in motion during former CFO and interim CEO Stephen Morana’s temporary tenure, with the launch of a fixed-odds sportsbook .
Exits from a number of European markets followed “ most notably Germany but also Greece and Cyprus “ while smaller grey markets became less of a priority as Corcoran seemed set to follow the whiter-than-white model put in place during his time in Ireland.
Still, it was months after Corcoran’s arrival that the first signs of a reduction in headcount became apparent, with UK director Peter Marcus making way and a number of staff in “underperforming” markets being shown the door.
At the time, a poll of eGaming Review readers saw more than one fifth suggest more layoffs were needed for Corcoran to bring the company forward, however the hundreds of departures which followed in February, and that are still being worked through at the time of writing, still came as something of a surprise if only by virtue of the number of people affected.
It may well have been the enormity of the action rather than the action itself which caused such shock, given Betfair’s earlier assertion that the November redundancies represented just the start of a longer period of restructuring. Indeed, one former employee, who left the company before Corcoran’s arrival, told eGR of the significant number of CVs coming his way from former colleagues at the end of last year.
“Ever since the first wave [of redundancies] it has been a case of seeing a lot of CVs coming in, before these people got pushed,” explained the former employee.
“The first wave for me seemed to be mostly marketing people or country managers in auxiliary markets which hadn’t regulated and which didn’t fit into Betfair’s future plans, but after that, people started getting nervous.”
Ruthless is best
While by no means a new phenomenon, it has been suggested that the latest round of redundancies carried a more ruthless quality, something which a former senior employee suggests could be for the best.
“Eventually the problem with Betfair became that no one really took responsibility for making decisions. There also were too many meetings,” he explains to eGR.
“The big difference I’ve noticed through working with various gaming companies, is that most of the more successful ones tend to be managed with clear direction and focus by a small team of decision makers and a lack of middle-management layers.”
Indeed, with rival operators “ even those that in the past might have been slow to meet targets or get certain projects off the ground “ picking up the pace might well be the right time for Corcoran to stamp his authority.
“It could be that it was the right thing to do “ in technology, senior management coming into the company may have thought that it was too top heavy in terms of number of employees,” says the unnamed employee.
“While the near-unique nature of the exchange means it’s almost impossible to make direct comparisons with other operators, Betfair’s management may still feel they have more people involved than they need in that area, however in other areas the numbers seemed about right, so now I’m not sure how the reduction in staff numbers will affect the customer-base.
“There have been redundancies before at Betfair so it would be wrong to suggest this is a new phenomenon, however when it was a private company the process didn’t seem to be as painful, and there was a longer consultation with a more generous package,” he adds.
The former employee has recognised changes since the early days of the operator’s existence, where what he describes as “a start-up feel”, continued long into the 2000s.
“At the beginning we always seemed to get a lot more done with a lot fewer people “ even into 2004 and 2005 it felt like a relatively small company and felt like we were changing something,” he adds.
This is by no means unique to Betfair with other operators looking outside the egaming industry as they pursue growth, however the USP of the exchange had arguably always been regarded as something more complicated and something that set Betfair apart from its competitors from a staff as well as a customer-base perspective.
This is part one of a two-part article which features in April’s issue of eGaming Review. Part two will follow tomorrow. For subscription options, click here.