Earlier today, we heard social network Hi5 was laying off a large number of their remaining employees. When we pinged them about this, we expected the usual “no comment” or simply no response. Instead, here’s what we got from President/CTO Alex St. John:
In support of our market strategy to launch next generation social gaming platform by early next year, our operations team migrated the site infrastructure to the Windows Server OS. This enabled us to consolidate servers, reduce data center costs and increase site performance (We achieved a nearly 12:1 reduction in server and database requirements). We have also been building the next generation site in a new architecture, .NET framework, and have moved away from Open Source and Java technology. As we have recently turned the corner on our technology migration efforts we have been able to significantly reduce the number of positions required to support the older hi5 site and are in the process of re-organizing the company to focus entirely on the development and deployment of our next generation social play site.
Did you catch that in there?
“we have been able to significantly reduce the number of positions required to support the older hi5 site and are in the process of re-organizing the company”
Poor phrasing and verboseness aside, yes, there have been a large number of layoffs.
That’s too bad. I feel like I’ve read this particularly story several times over the years. There were big layoffs in 2008 and 2009 as well. I recall writing about the massive round of layoffs at Hi5 in 2009, and the company trying to tell me the story was “inaccurate” but refusing to say how it was inaccurate. It turns out it was accurate. Though I don’t think anyone with the company back then is still with the company.
Once the third-place social network behind only Facebook and MySpace, Hi5 then pivoted towards gaming completely, and raised a new $14 million round last year. Now it’s on to another “next generation” version of Hi5. And apparently it’s one that requires much less manpower.
Says St. John:
We are still in the process of planning the next generation site launch and expect to release more information to the press as we finalize the details of the launch date and launch feature set.
The departing folks were very talented and we hated to let them go but our business is changing rapidly now. We hope that other great companies in this area snap them up quickly.
Update: We’ve confirmed with the company that 28 people were let go (19 full-time plus 9 contractors). These employees were working on site operations.