PubMatic Lays Off More Than 100, Plans To Refocus On Large Customers

PubMatic Layoffs

Sell-side platform PubMatic has dismissed more than 100 employees, AdExchanger has confirmed.

The layoffs, affecting 20% of the company's global staff, follow an 8% reduction in October. The combined cuts have reduced PubMatic’s workforce from 600 to about 450.

Additionally the company lost two key leaders on the publisher and demand side: Evan Adlman, VP of publisher development, and Diane Malloy, VP of global media solutions, both left for new positions prior to the layoffs.

Speaking with AdExchanger, CEO Rajeev Goel stressed the layoffs “came from a place of strength.” He said the company plans to refocus on clients that drive the most value.

“We saw a minority of publisher customers represent 90% of our revenue,” Goel said. “We’re doubling down on the minority of customers who are poised to grow with us.”

On the plus side, PubMatic has been profitable for the past three years. To continue growth and serve its customers, Goel said he had to course correct and lay off staff.

But a source close to PubMatic said that although the company had been first to market with multiple products, including an early lead on RTB and header bidding, ongoing struggles with execution, marketing and leadership have hamstrung its growth and allowed competitors to pull ahead.

In addition to those company-specific issues, it’s a tough time to be a SSP (or a DSP, as demonstrated by buy-side platform Turn's recent cuts). Most publisher platforms have limited unique demand. Additionally, publisher tool sets can feel interchangeable.

“In this market, where there are no longer exclusive publisher relationships and supply can be found all exchanges, how do these companies survive?” said the source, who declined to be named because of ties to the company.

SSPs are pursuing a range of tactics to bring in high-quality demand. In the case of PubMatic, the company plans to hire salespeople to drive adoption of its buyer media console among agencies and trading desks.

Goel said use of the buyer console increased 50% year over year. Private marketplace activity, which takes place through the console, increased 30% from the first half to the second half of the year.

Among the layoffs are some client operations staff, including workers in India. Goel concluded it’s better to have client-facing employees located near the publishers they serve. About two-thirds of both rounds of layoffs affected India-located workers. The company has 200 employees remaining there.

Layoffs sometimes prep a company for a sale, but Goel said that’s not what he has in mind.

“I’ve never felt any pressure from my investors for timing for an exit,” he said. Because PubMatic is profitable, it doesn’t need to raise more money and still has access to additional capital if needed, he said.

With a reduced headcount, PubMatic may still have a shot, the source said. “This could be a new lease on life for them. I think they do have a future, if they can focus on [unique publisher tools], where they’ve had some industry-leading capabilities.”

In February, PubMatic put its publisher count at 372, and Goel said the number has grown since then. He insisted the company has not lost traction in the US market, and said it continues to grow internationally.

Correction: An earlier version stated that the departures of Adlman and Malloy were part of the layoffs. Instead the two executives left earlier. 

8 Comments

  1. Sean Stevens

    I don't believe anyone is surprised to see this story. Pubmatic has hit a really rough patch over the last couple of years and bleeding publishers at a very fast rate. Between the fraud challenges and lack of execution, Pubmatic fails to bring anything unique to the table. Sprinkle in hidden buyer side fees and double dipping from the publishers pocket and one can quickly see why they are still profitable. During 2014, Pubmatic probably had more press releases than any company while having the least amount of innovation or operational products. It got so bad, that Press releases were more focused around ideas of products versus actual completed offerings. Its a sad time to see 2 pioneers of the adtech space become dinosaurs so quickly.

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  2. "He insisted the company has not lost traction in the US market"

    Riiiiiight....go ask pubs their thoughts on Pubmatic and report back

    Reply
  3. Anonymous

    The above news is complety wrong. Numbers incorrect. Rajeev said the same thing when the layoffs happened in October. It seems that he has mugged a speech to be said every time. The reality is that more than 200 employees were laid off in a single day and Rajeev didn't have the guts to inform them himself. Pubmatic is down in dumps and somebody only stupid would join their organization or continue working with them. I'm not vetting out my frustration here, I'm just stating the hard facts. None of their products work optimally with every client facing the same issue again and again.
    Our managers knew about this for atleast a week and they kept mum about it just to save their scalps. That is not what you expect from your leads and managers within whom you have placed so much of you trust.
    Just 5-6 layoffs in the US offices as compared to the 200+ from Indian offices. Now what does that tell you?

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  4. John Henry

    This feels like a case of hubris catching up with Pubmatic - finally.

    Management has talked everyone's ear off the past couple of years that they were going public, that Yahoo wanted to buy them, etc. This formed the basis of recruiting pitches, press releases, you name it.

    Leadership should have redirected the ego into a system that got beyond fraud, that customers didn't feel compelled to throttle and inevitably pause.

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  5. I'll just quote what Richard Branson has said, "Clients do not come first. Employees come first. If you take care of your employees, they will take care of the clients."

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  6. @ Rajeev :- any thoughts on why your team decided all of a sudden that 7 people can handle whole teams work ? if this is the case why didn't you took this measure earlier ? People trusted Mukul Kumar too but he is also not worth trusting

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  7. As stated above, the actual numbers were significantly higher than reported. Over 200 people were let go and it was not limited to India. There are some nice things happening like a promise to replace offshore ops resources with local ones in NY, however PubMatic has deeper problems in that they have a weaker product than their competitors in a field that is all but commoditized. They attempted to build out some newer differentiating products that competitors didn't offer but management did not do enough due diligence here. Customers ended up rejecting most of the new "innovations" and sticking with the base service. As time progresses more publishers will move on, or demand lower rev shares which will further squeeze PubMatic's bottom line.

    Their future is not bright unfortunately. I see two options: either selling out for pennies on the dollar like Undertone, or continued rounds of layoffs until there is nothing left to cut any longer.

    Reply

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