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Building a business dependent on YouTube is hard. Just ask Machinima.
The video game-centric YouTube network announced it is laying off 42 employees in a restructuring of its sales organization. Ironically the layoffs result in Machinima becoming even more dependent on YouTube for revenue.
The 42 axed employees were primarily in Machinima's sales organization, and Jay Sampson, Machinima's executive VP of global sales and advertiser operations, will be leaving the company, according to a person familiar with the matter.
Machinima is effectively shifting from a media company into a content studio, which may have to do with film-and-TV studio Warner Bros. looking to invest in the network. Machinima plans to outsource the bulk of its standard ad sales efforts -- like pre-roll and banner ad negotiations -- to YouTube's sales reps. The network's remaining sales staff will focus on more custom ad deals like creating branded entertainment content.
"Machinima, Inc., the number one global video entertainment network for young males, today announced a restructuring in and around its sales organization in an effort to create greater focus internally on selling creative ad solutions and branded entertainment, while better leveraging its longstanding partnership with YouTube to drive media sales," a Machinima spokesperson wrote in an emailed statement.
Machinima will retain sales teams in key markets like New York and Los Angeles to do more complext brand integrations, but at a reduced head count. Exact numbers weren't immediately available, but one person familiar with the matter said the sales team comprised more than a dozen but less than 40 people.