Cheezburger Lays Off 24, Restructures to Focus on Mobile

4/30/13Follow @curtwoodward

Cheezburger Network, which publishes well-known humor sites such as I Can Has Cheezburger and FAIL Blog, is laying off two dozen employees as it prepares to restructure for mobile-focused publishing.

Perhaps more significantly, the Seattle-based company is hoping to swap its current Web advertising model for a new focus on longer-term, integrated sponsorships.

In an interview, CEO and founder Ben Huh says Cheezburger is getting rid of its remote-worker setup for developers, which had its software team working anywhere from nearby Lacey, WA, to Rochester, NY. Those that decline to relocate to the Seattle headquarters—which many surely won’t be able to do—will have to find new work.

The company is also cutting its overall staff by 24 people across its departments, putting its post-layoff employee count at “the low 40s,” Huh says. The company’s small New York City office, which houses four people associated with Cheezburger’s acquisition of the Know Your Meme website, will remain in place.

All other activity, however, will be based in Seattle. Huh says the company needs to undertake a big redevelopment of its desktop and mobile offerings so that both work better together, and that such an effort requires the development staff to be in-house.

“That kind of a multi-device approach means we need better collaboration here in our Seattle office,” Huh says.

He also says the experiment of having roughly two-thirds of the staff in the office and another third all working remotely wound up creating two separate company cultures, and wasn’t sustainable for the long haul.

The business model also is undergoing a significant shift. Huh says that in the future, Cheezburger hopes to woo advertisers with longer-term, more dedicated sponsorship packages as opposed to the traditional model of selling Web advertising. As many types of publishers have found, notably in the news industry, the current online advertising model can be a volatile way of getting revenue.

“It’s a category where the spotlight isn’t quite shining yet for the mobile world,” Huh says. “There really aren’t great advertising products in mobile yet.”

Cheezburger has been one of the more celebrated consumer Web startups in the Seattle area—a surefire nationally known Web name. The company raised $30 million from Madrona Venture Group, Foundry Group, and others in early 2011. It followed that up with $5 million in additional venture investment at the end of last year.

Huh says the laid-off Cheezburger employees are being set up with possible interviews with other Madrona and Foundry startups. “We want to set them up for success down the road,” Huh says. “I’d like to think that many years down the road, these people reflect on their time here as something that was meaningful to them.”

Here’s the full text of a release that Huh sent out via e-mail, which includes supportive quotes from Madrona’s Greg Gottesman:

Cheezburger, one of the largest social humor sites, today announced its plans to prioritize its mobile initiatives and reorganize its operations into one centralized team based in Seattle. As a part of this effort, Cheezburger is eliminating 24 positions across the organization.

“Eliminating these positions was a difficult decision,” said CEO Ben Huh. “For Cheezburger to fulfill its promise, we need to be nimble and innovate on one platform optimized for any device, everywhere. Bringing our team in-house and streamlining operations will help us realize that vision.”

Cheezburger’s mobile usage has doubled from last year, achieving the top spot in comScore’s mobile humor category. The company is focusing its revenue model on high-value, marquee partnerships with advertisers seeking to drive deeper engagement with users. 

Cheezburger has appointed two new executives to help drive this next phase of operations and strategy for the company. Cliff Sharples, who previously served as Vice President of Product has been promoted to Chief Operating Officer in addition to seasoned technology veteran Jeff Brown, who has been named Chief Technology Officer.

“Cheezburger serves millions of people every day with the best collection of humor sites on the Web,” said board member Greg Gottesman, Managing Director of Madrona Venture Group. “We are confident that Cheezburger is focused in the right direction and fully support the team.”

 

Curt Woodward is a senior editor for Xconomy based in Boston. Email: cwoodward@xconomy.com Follow @curtwoodward

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  • Tova Hornung

    Interesting at a company meeting in February I was THE only one that said mobile was the most important and I lost my job today.

    • http://twitter.com/daliful Aeden Jameson

      Sorry to hear about your loss.

    • curtwoodward

      Really sorry to hear that, Tova. Are the offers to set up interviews with other companies financed by Cheezburger’s VCs coming to you guys, as Huh said in my interview?

      • Tova Hornung

        There is an open house tomorrow at Madrona, but nothing with Foundry. Its really hard because I liked it there and my dog Daisy did too.

  • http://twitter.com/daliful Aeden Jameson

    I’m curious. As I am with all companies that have layoffs, did the C-levels take pay cuts before laying people off due to their lack of long term strategic thinking and planning?

    • FiddleGirl

      The rumor I’ve heard is that 3 of 5 C-levels are being let go.

  • dursley

    Should read 24 MORE people. This used to be a 100 person company not so long ago….

  • HerbieGoesBananas

    Ben Huh is a thief. His business model is taking other peoples work and slapping his watermark on it. I’m sorry to all the people who lost their job though.