Rocket Fuel Reorgs And Lays Off 11%, Calls Plan To Return To Growth Unchanged

randy wootton16Rocket Fuel has made organizational changes, resulting in laying off 11% of its headcount – 93 services and admin positions – which will save $20 million in operating expenses.

It is the second round of cuts affecting more than 10% of Rocket Fuel's staff. In April 2015, the company let go of 11%, or 129 staffers. The most recent layoffs affect the services organization that supports SMBs, said Rocket Fuel CEO Randy Wootton.

“We have some reseller partners in place who will pick up those accounts,” he told AdExchanger. “That wasn’t where we wanted to put our capacity and capability.”

The reorg will see Rocket Fuel focusing around its predictive marketing platform, to be led by David Gosen, and media services, to be led by Simon Hayhurst. Both Gosen and Hayhurst are Rocket Fuel SVPs and will become GMs of their respective divisions.

Wootton emphasized that the layoffs do not signal a deviation from the plans that Rocket Fuel outlined throughout 2016 to become a growing company.

“In earnings, I’ve been clear about focusing on big accounts, where our AI works best and where there’s a lot of quantity,” he said. Rocket Fuel has recently made a big push to sign on large holding companies and had touted some of its successes in recent earnings calls.

Wootton added that while Rocket Fuel hasn’t yet given any 2017 guidance, the layoffs weren’t a means to achieve profitability. Rocket Fuel’s strategy, as described throughout 2016, necessitated the reorganization and the layoffs, Wootton said, not cost considerations: “The deeper understanding of how these new businesses needed to be run led us into the restructure.”

Rocket Fuel is still hiring engineers – and has 30 open positions, Wooten said. He doesn’t anticipate more layoffs.

“If we meet the plan we have in place – which is a return to growth – it should not require additional layoffs,” he said. “But the caveat is, as we get more focused on where we make our investments, there may be some positions that are laid off as we navigate those other investments.”

He said the cuts get Rocket Fuel to the right size based on its current revenue and its business structure. “It’s part of our transition as a platform company,” he said.

Wootton noted that he’s been through layoffs and restructurings before, during his previous tenures at Avenue A, Microsoft and Salesforce.

“As CEO, it’s certainly hard, but you keep employees motivated through the vision,” he said. “We’re much clearer in who we want to be in the next wave of the digital marketing industry. It’s predictive marketing. Programmatic is boring – it’s automated media buying and planning, and it describes something that’s not useful toward making marketing meaningful. We want to make marketing an accretive experience for consumers, and we’ll do that by working with agencies and brands.”

 

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