Nearly 17 million Americans have filed for unemployment over the last three weeks as the coronavirus continues to cripple the economy, and there seems to be no end in sight for the impact the virus is having on the ad-tech industry.
Ad tech has already been under pressure as dwindling investment and seismic changes to privacy and targeting strain balance sheets. The financial downturn caused by coronavirus seems only to be exacerbating that pain.
Six companies have confirmed to Adweek that they’ve been forced into taking cost-saving measures, including laying off staff, to stay afloat as the pandemic is forcing clients to pause marketing budgets. Adweek has previously reported on a slate of layoffs at MediaMath, TripleLift and Sojern.
BounceX, a performance marketing platform geared toward retail advertisers, laid off about 20% of its 383 staffers, while leadership took a pay cut. A spokesperson did not share the extent of the pay cuts, but said they allowed the company to save as many jobs as possible.
“COVID-19 has hit our client base really hard, especially if they had significant retail presence,” a BounceX spokesperson said. “In order to accommodate clients and help stabilize our business and their businesses, we made the immensely difficult decision to move forward with a reduction in force.”
The company had initially projected a 30% growth this year and budgeted for 150 new hires, but is now “forced to consolidate roles in order to do everything we could to take care of as many of our people as possible and continue to help our clients get through this,” according the spokesperson.
BounceX is also delaying its rebrand. The company announced in February that it was to be renamed Wunderkind on March 18, but is now postponing its full rebrand due to the coronavirus. It is unclear when the rebrand will go into effect.
LoopMe, a mobile ad-tech company of over 200 employees, laid off eight employees in the U.S. across sales, client services and analytics. The company also had to furlough 13 employees in the U.K. and pause some contracts for technology consultants in Europe.
Stephen Upstone, CEO and co-founder of LoopMe, said the company has had to reduce discretionary spend, pause new hiring and reduce roles where necessary due to financial uncertainty cause by the coronavirus. He added that he still believes the company “remains fit” for long-term success.
“This is an unprecedented time for our world, our industry and our lives as we navigate the COVID-19 pandemic,” said Upstone. “The advertising industry is experiencing the impact of coronavirus, and LoopMe, as an outcomes-based platform with revenues generated from advertising, is also affected.”
Sovrn also had to furlough 10% of its staff. According to LinkedIn, the company has 225 employees.
“We’ve made no layoffs, and anticipate quickly bringing those employees back full-time as market conditions improve,” said a Sovrn spokesperson. “Our cash position is strong, we have a large bank facility available should we need to use it, and we have three top-tier investment firms around the table.”
Measurement company VideoAmp, which employs approximately 200 people, laid off a small number of staff and gave employees the option to transfer part of their cash compensation into equity, said CEO Ross McCray. The company recently laid off 10% of staff.
McCray said the company is accustomed to seeing year-over-year growth exceed 150%, but VideoAmp has had to trim its revenue guidance to between 30%-50% YOY growth due to the coronavirus.
“There are no changes at all to our vision, our strategy, our roadmap and how we service our clients. None of that has been affected,” said McCray, who is not taking a salary for the time being.
Senior leadership at Adform, who recently hired a new CEO, have reduced their salaries by 20% for the next three months. All other employees have been asked to take the same pay cut and work four-day weeks if they can afford it. An Adform spokesperson said “virtually the whole company” took the pay cut.
Quantcast has also laid off roughly 5% of its workforce of over 600 employees, which was first reported by AdExchanger. The company has also instituted tiered pay cuts, with co-founder and CEO Konrad Feldman forgoing his salary.
“In response to the economic impact of COVID-19, we have made a number of changes to our business including the difficult decision to eliminate a number of roles,” Feldman said. “While these decisions are hard, these are extraordinary times and these changes are necessary to achieve our long-term goals. Saying goodbye to colleagues is never easy, and we’re working diligently to support our team through this challenging time.”
Adweek previously reported that Adara halted its media buying practice for travel clients and a spokesperson for the company confirmed that an unspecified number of layoffs “related to our pivot as well as related to our anticipation of lower marketing and advertising spending by some travel companies in the near term.”