Rubicon Lowers Revenue Expectations and Will Lay Off 125 Workers

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After lowering its guidance for the year, digital advertising marketplace Rubicon Project of Playa Vista announced that it would lay off 125 workers, or 19 percent of its workforce.

The advertising exchange’s GAAP revenue this year is projected to be $271 million to $281 million, lower than the $275 million to $305 million it had projected in the second quarter.

Some of the disappointing revenue numbers stem from the firm being slow to implement header bidding, a new trend in the online advertising industry. Header bidding is a process through which advertising exchanges compete all at once to buy ad space on a website. Previously, digital ad space was shopped around to advertising exchanges one at a time until inventory was sold. Web publishers employ header bidding because the pressurized competition among ad exchanges drives up advertising rates.

“As expected, Q3 was a challenging quarter for both our industry and our business in particular and we still have work to do to deliver the revenue growth that we know our business is capable of generating,” said Chief Executive Frank Addante, in a statement.

The layoffs are expected to reduce future employee-related costs on an annual basis by about $18 million. In addition, the company implemented other cost control initiatives that it anticipates will save it about $12 million annually.

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