Tuesday was not a good day for the San Francisco Bay Area's new media community.
The latest bad news to hit was word that blogging software developer Six Apart has laid off about 8 percent of its 200-plus staff. In a post on the company's public blog, CEO Chris Alden announced the cuts, writing, "We are reducing the size of our full-time staff by around 8 percent and are making some organizational changes as we prepare for 2009."
Though Six Apart seems to be growing--"with Q4 2008 on track to be our biggest revenue quarter ever, and cash flows from our revenue, past financings and sale of LiveJournal providing funds that will serve us well going into next year and beyond"--the company clearly felt it had to make some moves to streamline as the economic crisis turns its crosshairs on Silicon Valley and the San Francisco technology industry.
Already Tuesday, for example, Wired.com and Current TV both suffered layoffs--and that's on top of many other companies that have already begun reducing headcount.
"So why are we doing this?" wrote Alden. "First, as with many companies these days, we are being proactive about keeping our expenses low. Second, with so many changes in 2008, and looking forward to the changing market in 2009, we have to re-balance our organization accordingly."
Among the changes Alden explained in his blog post, he said that the company is merging its marketing, community, and support groups; it is consolidating its Six Apart professional services group, adding people to the group from other parts of the company--and will continue to hire for that group; it is creating a single technology team comprising operations, hosted engineering, analytics, infrastructure, and open platforms; and continuing to push its Six Apart Media advertising program.
As part of the goal of slashing costs, Alden continued, he and other managers have taken 15 percent pay cuts.
Now, as layoffs throughout the media industry pick up steam, those with jobs are no doubt getting more and more nervous. Things, as they say, are likely to get a good deal worse before they start to get better.
Swedish video game developer Avalanche Studios, which made 2006's Just Cause, has apparently decided to slash nearly half its staff after losing contracts for two new games.
According to GamesIndustry.biz, Avalanche said it will lay off 77 of its 160 employees after losing the contracts, which would have been worth as much as $34 million.
The company's CEO, Christofer Sundberg, told GamesIndustry.biz that it had lost the first contract in February, but had been able to weather that by moving staff around. But after the second contract was lost last week, it had nowhere to put the staff that had been working on that project.
While these layoffs are specific to Avalanche, it comes at a time when many involved in making video games have been saying that the industry is insulated against the economic downturn due to the fact that people traditionally spend money on entertainment even when times are tough. And while it's not clear if the layoffs can be tied to the financial crisis, the move certainly isn't what people in the industry want to be seeing right now.
Avalanche will now put more emphasis on creating Just Cause 2 for publisher Eidos, as well as The Hunter for Emote Games.
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