Rocket Fuel axes 11% of its staff amid ‘shift to platform business'
Rocket Fuel is the latest adtech outfit to announce significant cuts to its workforce with the company announcing it is to let 11% of its global headcount go, resulting in 93 job losses, as the company continues its shift to becoming a platform business.
Rocket Fuel's latest move will see it shed 93 jobs resulting in $20m worth of savings a year
An announcement on its investor relations page claims the “reorganization will also result in the elimination of 93 services and administrative positions”, this along with separate cost-cutting exercises will result in $20m worth of savings over a 12 month period, according to Rocket Fuel.
In addition to this, Rocket Fuel announced it is organizing its operations around two core offerings: predictive marketing platform solutions and media services.
The reorganisation will also see David Gosen, currently Rocket Fuel’s SVP and managing director of international, expanding his role to become general manager platform solutions, and Simon Hayhurst, currently SVP of product, becoming general of its media services business.
Rocket Fuel’ s chief executive Randy Wootton described these moves as part of the embattled adtech outfit’s plan to transition into a “leading predictive marketing platform provider”, away from its earlier positioning of generating the bulk of its revenues from media sales.
“In the third quarter of 2016, we experienced growth of 141% in our platform business, and signed our first platform agreement with a major US agency holding company,” reads the statement.
Wotton further explained how Rocket Fuel’s strategy for returning to growth in 2017 will include working with agencies and directly with advertisers to roll out its platform solutions business – a move that should have lower costs of sales and service – as well as rolling out its “Moment Scoring” technology, plus partnering with “systems integrators”.
Cotton concluded: “We are inspired by the evolution of digital marketing from programmatic media buying to truly predictive marketing, particularly the application of AI and big data to predict the potential of every moment and make marketing more meaningful and accountable. The business models and cost structures for our media services and platform businesses are different, so the changes we are making today will better align our company to these goals.”
The announcement of the cuts follows a similar “efficiency program” pursued by Rocket Fuel in 2015, a move that saw it reduce its workforce by 11% (then amounting to 129 jobs), which it claimed would drive $30m in savings. This move came soon after its co-founder and then CEO George John stepped down from the role.
Rocket Fuel, a company that listed publicly in 2013, has experienced a tough time in recent years when it comes to Wall Street. In its latest quarterly results reported in November, it revealed that revenues for the three months to September 30 were $110m. This compared to $112m a year beforehand, despite reducing its operational loss to $9m and is compared to $135m 12 months earlier.
News of the announcement comes just two months after fellow adtech outfit Rubicon Project (a company that is also publicly listed) announced it was to shed 19% of its global headcount under similarly stressful financial conditions.
A number of weeks before that AppNexus, an adtech outfit that is widely expected to go public later this year, similarly announced it was to make 150 redundancies across its global headcount.