AT&T's Otter Media Lays Off 10 Percent of Staff in Restructuring

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Otter Media CEO Tony Goncalves

The company is reworking its direct-to-consumer brands and Fullscreen business.

Otter Media has laid off around 10 percent of employees amid a reorganization of its portfolio of digital brands including Fullscreen, Rooster Teeth and Ellation. 

Among the changes at the AT&T-owned digital media business is a plan to integrate the gaming-centric Machinima brand under the Otter umbrella. The company is also consolidating direct-to-consumer businesses Rooster Teeth, Crunchyroll and VRV under the Ellation banner, and refocusing Fullscreen's creator and brand-focused businesses.

"Otter Media completed a long-planned reorganization today to make our business more focused, profitable, and ultimately better positioned to harness the opportunities in the dynamic digital media landscape," a company spokeswoman said Tuesday in a statement. "As a result of these changes, the size of the organization has been impacted, and we had to say goodbye to valued employees." 

Otter Media was established in 2014 as a joint venture of AT&T and The Chernin Group that would buy, invest in and grow digital media businesses. Its brands include Fullscreen, Crunchyroll, Ellation and Rooster Teeth. It also owns stakes in Reese Witherspoon's Hello Sunshine and Van Toffler's Gunpowder & Sky. AT&T bought out TCG's stake in the business over the summer following its acquisition of Time Warner. Through the purchase of Time Warner, since renamed WarnerMedia, AT&T also acquired digital brand Machinima. 

In a memo to staff obtained by The Hollywood Reporter, Otter CEO Tony Goncalves wrote, "This past year, we invested heavily in our businesses. We acquired companies, established two new studios and launched a gaming division at Crunchyroll, set the foundation for increased programming quality at Rooster Teeth, and elevated our tech platforms and data capabilities. All this during a period of significant change, including our acquisition by WarnerMedia earlier this year."

The changes at Otter, in the works before its sale to AT&T, are part of an industrywide moment in which companies are taking stock of what parts of their businesses to invest in going forward. Otter has found success with focused, talent-driven properties like Rooster Teeth and Hello Sunshine. 

To that end, the company will reorient its direct-to-consumer brands under the leadership of Ellation's Tom Pickett. Goncalves wrote that "changes will be minimal," noting that one difference will be that the sales groups for both Crunchyroll and Rooster Teeth will be aligned going forward. 

At Fullscreen, the company will be refocused around creator services led by Beau Bryant, a brand studio led by Maureen Polo and a brand services group led by John Holdridge. The groups will operate independently but work together when needed, and all three executives will report to Otter Media COO Andy Forssell. The Fullscreen Direct fan platform business will be shuttered and there will be a transition plan for its 75 clients. 

Top-level changes also include new reporting structure for the legal, human resources, brand marketing and finance teams.