DataXu laid off approximately 30 staffers earlier this week, according to multiple sources, the same week the company named Ed Montes as president and general manager of its TotalTV unit.
Montes confirmed the layoffs, telling Adweek that less than 10 percent of the company’s roughly 300 employees were affected. The ultimate decision about who was going to be let go came over the past few weeks, “not months, and not days,” Montes said.
He added that this wasn’t about trimming the fat of the company or laying off people that were bad at their jobs. “Any reductions or cuts that we’ve made are about the organizational structure of the company, not the people involved,” he said.
The layoffs included a mix of senior and junior staffers who didn’t ultimately fit with the TV-forward vision the company is undergoing. These reports come as the ad-tech company, which specializes in online video and is positioning itself to capitalize on the nascent OTT sector, reported “record growth across its TotalTV business” with Montes now reporting directly to DataXu CEO Mike Baker.
In an April 3 statement, Baker said, “We’re doubling down on our tremendous success with TotalTV by increasing our investment in the business and organizing our leadership and operations around the solution to go further and faster.”
The statement goes on to detail how Baker and Montes will host an investor day ahead of a TotalTV roadshow at which it hopes to update industry stakeholders on its latest OTT offering.
DataXu was first reported to have appointed GCA Advisors over a potential sale of the company in late 2018 with market sources claiming the sought-after exit price was in the range of $300 million. Since then, Comcast has been heavily tipped as the frontrunner for the DSP, and in recent days AdExchanger reported it was also interested in fellow ad-tech company Cadent.
DataXu’s leadership was thought to have initially sought a much higher valuation than the $300 million price tag, although the numbers have ranged between $200 million and $300 million, according to sources.
Market observers maintain the most realistic exit strategies for ad-tech companies in the current climate are to sell to strategic buyers or private equity. This compares to the early part of the decade when many ad-tech companies opted for IPOs, only to experience steep declines in share price. Many have since been taken private, with few remaining ad-tech companies still listed on the public markets.
A Comcast purchase of DataXu would appear to complement its $39 billion majority stake in Sky, given the pan-European media giant itself invested $10 million in the DSP in early 2016 in order to improve advanced TV media offerings such as Sky AdSmart and AdVance.