Machinima Cuts Staff, Shuts Some Channels After New Financing (Exclusive)

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Just because Machinima secured $24 million in new funding doesn’t make it immune to some belt-tightening.

The digital content network laid off 13 of its 90 employees Friday, according to sources, as well as a few part-time staffers. The eliminated positions were all production jobs tied to programming being discontinued at Machinima.

Machinima Respawn, a gaming-themed YouTube channel that was once one of Machinima’s most popular and longest-running attractions, is being canceled, as are some of the programs on another of its YouTube channels, Machinima Live. Also axed was a Machinima series titled “Ten FTW.”

Staff assembled at Machinima headquarters Friday were told that the cuts were necessary due to the declining popularity of the programming with users and advertisers.

A spokeswoman for the company confirmed the cuts, and issued a statement on behalf of the company.

“As Machinima positions itself for the future, we must focus resources toward high-growth opportunities. Toward that end, today Machinima released 13 production staff associated with Respawn, TFTW and certain shows on Machinima LIVE as this content was simply not delivering the monetization that supports our path to profitability. Machinima is in development on its expanded 2015-16 original programming slate, details of which will be unveiled at its Newfront presentation on May 4. Separately, the company also has 15 open positions associated with programming, talent development, business intelligence, sales, marketing, product development and engineering.”

The layoffs were the first round of cuts at Machinima since CEO Chad Gutstein came in nearly one year ago. Prior to his hire, the struggling company withstood several rounds of layoffs. Machinima was once one of the most popular multichannel networks on the Internet, but languished for years until recovering some momentum in 2014.

Warner Bros., which took an $18 million stake in Machinima last year, led a new round of financing Thursday that also included investments from Redpoint Venture, MK Capital, Coffin Capital and Allen DeBevoise.