Austin-based digital giant Rooster Teeth has laid off 13% of its workforce, the first major staff cut it’s made since it launched in 2003.

“Today has been a tough day at Rooster Teeth, and is unlike any other moment of organizational change we have experienced together,” CEO Matt Hullum wrote in a memo to staff that was later published on Rooster Teeth’s website. “As we looked ahead at all of our upcoming opportunities and challenges, we had to make some difficult decisions about how we are organized.”

Those decisions resulted in more than 50 people losing their jobs across all Rooster Teeth’s divisions, including content production, advertising, distribution, and e-commerce, per Variety. Rooster Teeth’s last reported employee count, prior to layoffs, was 419 people.

Hullum added that the company “will be doing everything we can to ease their transition, including helping them find their next opportunities.”

Rooster Teeth — which has 9.5M subscribers on YouTube, runs its own streaming service First, and operates the annual gaming convention RTX — has survived multiple organizational changes since it was acquired in 2014 (for an undisclosed sum) by entertainment company and network Fullscreen. In January last year, Fullscreen was acquired by Otter Media, a joint AT&T-and-The Chernin Group venture that incubates digital brands. A few months later, while AT&T was in the midst of acquiring Time Warner for $85 billion, it also bought out Chernin’s shares of Otter Media, making it the company’s sole owner. Then, following the conclusion of its Time Warner acquisition, AT&T formed new media entity WarnerMedia, and made Otter Media a subsidiary of that entity.

That brings us to last December, when Otter Media laid off a whopping 140 staffers amidst a reorganization of WarnerMedia’s brands, including Rooster Teeth. Rooster Teeth’s teams were reportedly unaffected by the layoffs, and continued operating as normal, but other brands — like Machinima — were not as fortunate.

In the months since Machinima’s shuttering, Rooster Teeth has revived some of its key shows, like Inside Gaming, All Your History are Belong to Us, Titanfall Dropouts, and Boss Battles. Also in the past few months, Rooster Teeth has seemingly been on a general content upswing (aside from the sudden departure of Sugar Pine 7): it announced its first original video game, debuted star-studded anime series gen:LOCK, revealed it’s producing YouTube interactive special A Heist with Markiplier, and just a couple of days ago, signed a deal with DC to launch a Batman clothing collection.

In his memo, Hullum said the layoffs are part of Rooster Teeth looking forward. “[O]ur managers have adjusted teams to meet the needs of our future,” he wrote. “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.”

You can read Hullum’s full memo below.

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.

 

Correction: A previous version of this story reported that staffers had been laid off from Rooster Teeth’s events division. A company representative confirmed no employees were laid off from events. This story has been updated to reflect that.

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