OpenX Lays Off 100 as Part of Strategic Overhaul

The supply-side outfit announced the layoffs, which affect both its New York and Pasadena, Calif., offices and come as part of a global organizational realignment that began earlier in the year and also included the closure of its Santa Clara, Calif., office.

The moves include the consolidation of OpenX’s engineering and technology services offerings into two global hubs, which will be located in Pasadena and Krakow, Poland, where the company’s headcount will more than double next year.

It is unclear exactly how many people work at OpenX after today’s cutbacks—its Crunchbase profile currently says 500–1,000—but a spokesman highlighted that the ad-tech unit is actively recruiting for more than three dozen roles.

A company statement sent to Adweek noted that the OpenX is in its fifth straight year of profitability and that more formal announcements regarding product rollouts and partnerships are to come early next year.

“2019 will be a year of major investment for OpenX in terms of product, partnerships and geographic expansion,” the statement read. “We recognized early that this requires diversification of our core business and increased investment in growth areas. … We are now operating from a more streamlined organizational structure to enable us to continue to succeed in the market.”

In particular, the moves are thought to help the company position itself as it seeks to double down on video and reduce its reliance on its ad-exchange operations, an area of ad tech widely believed to be commoditized.

Speaking with Adweek about similar measures elsewhere in the ad-tech sector, Jay MacDonald, managing partner at investment bank Digital Capital Advisors, said focusing on profitability was a “smart move” given the appetite for an ROI among VCs that were early to invest in ad tech.

“There’s three things driving M&A in the space: scale, synergies and profitability,” MacDonald said. “We’re at a time in the market when everybody is for sale for the right price and if you’re not profitable you’ll get to a place where investors tell you to go and find a home [by way of a fire sale].”

Matt Prohaska, CEO of Prohaska Consulting, said, “When you also factor the shift from managed service to self-service or expanding beyond display and mobile web, a lot of these companies … have to accommodate, and not everyone on every team can make the transition.”