CutOut

Start with a new image in RGB mode and
use black backround.
Apply the text with the texttool and fill
it with white..
Apply the Gaussian Blur filter with the
settings 2- 3 dependig how much blur
you want.
Add a new layer, apply the same
text,select inverse and fill it with
desired color.

Now you can move the red text with
the move tool, and adjust the cutout
distance.

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