Ozy announces it is shutting down, following bombshell New York Times report

• Ozy is shutting down after a New York Times report shed light on its business practices.

Ozy Media, the digital media company under fire after a bombshell New York Times report about its workplace culture and business practices, announced it was shutting down on Friday.

"At Ozy, we have been blessed with a remarkable team of dedicated staff," Ozy's board of directors wrote in a statement. "Many of them are world-class journalists and experienced professionals to whom we owe tremendous gratitude and who are wonderful colleagues. It is therefore with the heaviest of hearts that we must announce today that we are closing Ozy's doors."

Carlos Watson and Samir Rao founded Ozy in 2013 on the promise of building a new kind of media company aimed at millennials, and garnered $83 million in funding and backing from many high-profile investors and celebrities.

The unraveling started when the Times reported that Rao, Ozy's chief operating officer, was caught impersonating a YouTube executive during a fundraising call, along with raising questions about Ozy's audience metrics.

Meanwhile, Ozy alumni told Insider about the company's grueling work practices and raised doubts about the company's audience claims.

The fallout from the Times story came fast. The company was facing an FBI probe over the phone call incident. Advertisers and investors started demanding answers. Board chair and hedge fund billionaire Marc Lasry stepped down from the board.

And the world's biggest advertising company WPP just advised all its clients, which include Ford, Google, Facebook, IBM, Unilever, and Mondelez, to pause their ad buys on Ozy until further notice, said a person with direct knowledge.

The shutdown also leaves Ozy's many investors holding the bag. Its backers have included Marc Lasry, Laurene Powell Jobs, Ron Conway, and LionTree. Axel Springer, parent of Insider, also invested.