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Cheezburger_LogoCheezburger today announced that it is cutting 24 employees, or about 35 percent of its staff, as it struggles with the changing economics of more people viewing content on mobile devices.

“We have seen a pretty big transition in our audience from desktop to mobile, and we are going to continue to see that for years to come. We need to restructure the company to be set up for that,” said CEO Ben Huh.

In an interview with GeekWire, Huh said that the Seattle comedy network remains the largest humor site on mobile. But because ad rates are lower on smartphones they’ve not been able to re-position the business.

“Mobile continues to grow, but the revenue we generate from it is significantly less,” Huh said. “We want to take this year and think about how we can generate similar returns in mobile, or else you are going to have the case of one part of your platform subsidizing the other.”

Cheezburger CEO Ben Huh
Cheezburger CEO Ben Huh

Cheezburger raised $5 million last December, which followed a $30 million round in 2011. It now employs a little more than 40 people.

As part of the layoffs, Huh said that they plan to restructure the engineering operations in order to have more of the staff at the company’s Seattle headquarters. The company also recently tapped Jeff Brown, formerly of Valve and Gas Powered Games, as CTO. He replaces Scott Porad, who left the company last year.

Huh said that the company is in a strong financial position, and that today’s cuts will help put it on a more solid footing.

“I want to build a long-term business. I am not here to pump up the numbers, and sell it next year,” Huh said. “This is really hard for everybody and we are letting go of some really good people, but at the end of the day I need to do what is right for the business, and if that means cutting back now to take advantage of the mobile world, I will do it now.”

Cheezburger continues to operate about 50 comedy sites, including Fail Blog and The Daily What. It is best known for I Can Haz Cheezburger, a collection of cat photos with funny captions.

Huh said they likely will not launch any new branded sites, and they are moving away from the “separate site approach.”

“Instead of a creating a new Fail Blog, which is called something else, we will probably end up with more categories,” he said.

Here’s the press release:

Cheezburger, one of the largest social humor sites, today announced its plans to prioritize its mobile initiatives and reorganize its operations into one centralized team based in Seattle.  As a part of this effort, Cheezburger is eliminating 24 positions across the organization.

“Eliminating these positions was a difficult decision,” said CEO Ben Huh. “For Cheezburger to fulfill its promise, we need to be nimble and innovate on one platform optimized for any device, everywhere. Bringing our team in-house and streamlining operations will help us realize that vision.”

Cheezburger’s mobile usage has doubled from last year, achieving the top spot in comScore’s mobile humor category. The company is focusing its revenue model on high-value, marquee partnerships with advertisers seeking to drive deeper engagement with users.

Cheezburger has appointed two new executives to help drive this next phase of operations and strategy for the company. Cliff Sharples, who previously served as Vice President of Product has been promoted to Chief Operating Officer in addition to seasoned technology veteran Jeff Brown, who has been named Chief Technology Officer.

“Cheezburger serves millions of people every day with the best collection of humor sites on the Web,” said board member Greg Gottesman, Managing Director of Madrona Venture Group.  “We are confident that Cheezburger is focused in the right direction and fully support the team.”

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