By Sahil Patel
Update 09/19/2013: Several former Machinima employees have confirmed the layoffs on Twitter. Among the let go is Machinima Respawn producer and host Scott Fisher (APL). Fisher was featured in the most recent Respawn upload “GTA 5 Heist.”
Machinima*, the web video entertainment network for gamers and gaming culture, is laying off between 20–30 employees, according to a source with knowledge of the plans.
In a statement from the company, which you can read in full below, Machinima says it is making an “increased commitment to premium programming, its YouTube affiliate network, and multi-platform distribution.” As a result, the company has decided to cut roughly 10% of its workforce (22 of 206 employees) so it can move that money into these growth areas.
It’s very similar to what Machinima said when it let go of 20 staffers last December. At the time, Machinima said: “Today Machinima underwent a reorganization to address its global growth, and this process unfortunately resulted in layoffs. Less than 10% of Machinima’s workforce was affected.”
Here is the full statement from today:
“In connection with Machinima’s growth plan, the company is making an increased commitment to premium programming, its YouTube affiliate network, and multi-platform distribution. As a result of an increased need for investment in these areas, Machinima is eliminating positions representing approximately 10% of the company’s workforce equating to 22 of 206 employees. Over the next several months, Machinima will announce new programming and distribution initiatives that will advance the next phase of this strategic plan.”
Speculation was rife during the summer that Machinima wants to raise a mega-round of funding (in the range of $70–80 million) as it looks to launch a premium OTT platform. The company has reportedly been in discussions with Hollywood studios like Warner Bros. and Paramount to either invest in Machinima or partner with the company on premium, TV-quality programming.
The end-goal is to simply create a premium, Netflix or HBO Go-like OTT platform, which would offer an array of TV-length shows that Machinima can license for its gaming- and action-loving audience (so really, not all that simple). That’s why the company wants to raise such a massive round of financing.
While it’s unclear how that process is going, these layoffs suggest that Machinima isn’t raising as much as it wants to.
Another way to look at it, if you’re in a speculative mood, is that Machinima has a partnership in the works with another media company and these layoffs are to eliminate redundancies within the workforce. Though Machinima has never confirmed it publicly, rumor has it that the company at one time considered a sale.
* Machinima CEO Allen DeBevoise is an investor in VideoInk.