CEO Matt Hullum relayed the news to the staff Thursday, calling it “a tough day … unlike any moment of organizational change we have experienced together.” (Read the full memo below.)
Founded in 2003, Rooster Teeth has amassed a content portfolio spanning podcasts, animation, live events and web series like the mainstay Red vs. Blue. As it has entered the larger media arena, the Austin-based company has faced stiff challenges in a digital ad landscape dominated by Google and Facebook as well as WarnerMedia parent AT&T’s intense drive to cut costs.
Otter Media Moves Under WarnerMedia Purview Of Entertainment Chief Bob Greenblatt
“Our industry is evolving rapidly, and we have to evolve with it if we want to succeed,” Hullum wrote. “As we begin a new chapter, we have the opportunity to focus on what we do best: creating great content for our community and partners, supported by key lines of business including advertising, distribution, memberships, events, and e-commerce.”
Otter, owner of digital brands including Crunchyroll and Fullscreen, began as a joint venture between AT&T and the Chernin Group. AT&T last year rolled it up and positioned its assets inside WarnerMedia, where they will join those feeding the soon-to-launch streaming service HBO Max.
Digital media companies of all stripes have faced significant headwinds over the past couple of years, particularly in the video space dominated by YouTube, where Rooster Teeth has 45 million global subscribers. Funny or Die, Vice, BuzzFeed and Vox are among the many companies forced to lay off staff in order to stay competitive.
Variety had first word of the cuts.
Here is the internal email from Hullum, which was also posted on the public Rooster Teeth site:
Hello everyone – Today has been a tough day at Rooster Teeth, and is unlike any other moment of organizational change we have experienced together. As we looked ahead at all of our upcoming opportunities and challenges, we had to make some difficult decisions about how we are organized. Unfortunately, this meant that earlier today we reduced the size of our team by approximately 13% overall. This decision is not reflective of anyone’s individual performance, and we’re thankful for all that our former colleagues have contributed. We will be doing everything we can to ease their transition, including helping them find their next opportunities.
As discussed during your department meetings, our managers have adjusted their teams to meet the needs of our future. Our industry is evolving rapidly, and we have to evolve with it if we want to succeed. As we begin a new chapter, we have the opportunity to focus on what we do best: creating great content for our community and partners, supported by key lines of business including advertising, distribution, memberships, events, and e-commerce.
We’ve accomplished a lot this year already: gen:LOCK and Immersion have both debuted successfully on TV, we’ve announced new content partnerships with DC, HBO Max and others, and we continue to produce the amazing programming that brings joy to our community every single day.
We can look forward to more success along this path: continuing to grow our relationships within the WarnerMedia family and beyond, and finding new platforms where we can continue our pioneering creative work in gaming, animation, and comedy.
With many teams moving to new office space tomorrow, we will meet briefly on Monday to discuss these changes further. I look forward to seeing you, as I always find renewed confidence, optimism, and excitement in our mission when we come together as a team.
Finally, I want to wish all our former co-workers the very best. We’re thankful for the passion and creativity that they brought to Rooster Teeth, and grateful for the friendships we’ve formed. I have been fortunate to work closely with many of those leaving today, and I’m sad to say goodbye, but also incredibly proud of what we accomplished together.
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