Rocket Fuel late Monday announced a restructuring that it says will enable the company to continue its transformation into a SaaS-based (software as a service) platform company. In so doing, the company said it eliminated 93 jobs, or 11% of the company’s headcount, and shuffled executive responsibilities. The job cuts were in “services and administrative” roles, according to the company.
The organizational changes announced will focus on the company’s predictive marketing platform solutions and media services businesses. The company said David Gosen — currently SVP and managing director of international — will expand his role to become GM, platform solutions & international, and Simon Hayhurst, currently SVP of product, will become GM of media services. All marketing functions have been consolidated under CMO Eric Duerr. CRO Rick Song’s team continues to sell platform solutions and media services.
Rocket Fuel’s media services business still comprises the majority of its business — 80% as of the third quarter — while the platform business stood at 19%. The company is looking to grow the platform business while keeping its media services business.
Rocket Fuel also said it has continued to streamline its operations — consolidating offices and in some cases, moving to less expensive office space. These changes, employee cuts, and other cost-cutting measures are projected to help reduce operating expenses by approximately $20 million annually, according to the company. The question is: “How do you create a profitable business? Our expense structure was too big for what we’re doing,” said Rocket Fuel CEO Randy Wootton.
Wootton touted the company’s accomplishments, noting that it had experienced 141% growth in its platform business in third-quarter 2016 and signed its first platform agreement with a U.S. agency holding company, which it didn’t name. Wootton stressed that the restructuring was needed in order to continue the company’s ongoing transformation into a predictive marketing platform provider. “How do we simplify our story?” Wootton asked. “How do you structure profitable business units?”
He emphasized that the job cuts involved employees who supported small-business customers and handled administrative and human resources functions. He said there were no cuts in engineering and that there are, in fact, 30 openings for engineers. “We are redirecting capacity to fuel growth in our platform solutions business,” Wootton said.