Bracing for Storm, Veoh Lays Off 18 Percent

Updated Nov. 6, 2:45 PST; See below for details about Veoh

San Diego’s Veoh, one of the top Web-based providers of video and TV programming, has laid off 20 people, or 18 percent of its 110-employee payroll.

The cutbacks, reported by PaidContent, TechCrunch, and others, apparently are intended to help the startup survive hard times expected in the months ahead.

Veoh aims to deliver full-screen, high-quality video over the Web, bypassing traditional broadcasting systems and regulatory restrictions. Investor Todd Dagres of Boston’s Spark Capital talked about his interest in Veoh in September with Xconomy’s Bob Buderi.

Veoh has about 60 employees at its San Diego headquarters, mostly in engineering and product development, spokeswoman Gaude Paez told me this afternoon. Another 25 work in business development and marketing in Los Angeles, mostly to interact with Hollywood studios, TV networks and other video developers. A handful of others work in New York and Chicago.

Veoh generates revenue by selling advertising throughout the videos it offers, and through conventional online advertisings, including banner and display ads. Paez says Veoh’s video content is free to its estimated 25 to 28 million users around the world.

“It’s very hard to predict how soft the advertising market may get,” the spokeswoman said. “It just makes more sense to make the tough decisions now rather than later.”

Last month, PaidContent reported that Veoh laid off employees and shut down its Russian office in St. Petersburg. Veoh described the cutback in Russia as a strategic decision rather than a financial one, saying it wanted to move its development staff to San Diego.

Veoh CEO Steve Mitang told TechCrunch this move is financial and reflects the new economic reality. The company insists it is still strong, financially. Veoh has raised $70 million from investors that include Goldman Sachs, Spark Capital, and Time Warner Investments, including $30 million last June from Intel Capital, Adobe Systems, and several prominent private investors.

Author: Bruce V. Bigelow

In Memoriam: Our dear friend Bruce V. Bigelow passed away on June 29, 2018. He was the editor of Xconomy San Diego from 2008 to 2018. Read more about his life and work here. Bruce Bigelow joined Xconomy from the business desk of the San Diego Union-Tribune. He was a member of the team of reporters who were awarded the 2006 Pulitzer Prize in National Reporting for uncovering bribes paid to San Diego Republican Rep. Randy “Duke” Cunningham in exchange for special legislation earmarks. He also shared a 2006 award for enterprise reporting from the Society of Business Editors and Writers for “In Harm’s Way,” an article about the extraordinary casualty rate among employees working in Iraq for San Diego’s Titan Corp. He has written extensively about the 2002 corporate accounting scandal at software goliath Peregrine Systems. He also was a Gerald Loeb Award finalist and National Headline Award winner for “The Toymaker,” a 14-part chronicle of a San Diego start-up company. He takes special satisfaction, though, that the series was included in the library for nonfiction narrative journalism at the Nieman Foundation for Journalism at Harvard University. Bigelow graduated from U.C. Berkeley in 1977 with a degree in English Literature and from the Columbia University Graduate School of Journalism in 1979. Before joining the Union-Tribune in 1990, he worked for the Associated Press in Los Angeles and The Kansas City Times.