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OnLive Layoffs Follow-up

Joystiq has a rundown of what went down during a final meeting with the staff of OnLive before they were all fired, clarifying the report that the entire staff was being let go as part of some sort of reorganization. The company has undergone an Assignment for the Benefit of Creditors, or ABC (a form of bankruptcy), and will continue under the ownership of a venture capitalist. Word is only "the essential" portion of the company's 150-200 staff will be rehired going forward as the new owner attempts to bring the cloud gaming service into profitability.

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45. Re: OnLive Layoffs Follow-up Aug 19, 2012, 12:46 Beamer
 
wtf_man wrote on Aug 19, 2012, 12:29:
HorrorScope wrote on Aug 19, 2012, 11:42:
deqer wrote on Aug 19, 2012, 00:53:
Corps should stop leading people on, and be real with them and say "look, we actually aren't sure how this will pan out, so this will just be a 1 year contract job." But noooo, corps don't like to do this for some reason; they like to lead you on, hire you, then do the old "Layoff" trick ...

In this case it seems even much worse. They setup the company to go bankrupt from the start it seems and offered false stock incentives to those they hired on. They basically just changed hands and the only losers are employees and creditors. I happen to know just a few companies like this that I go out and do some work for. These people are real shysters, finding any type of loophole for their sole greed. The patents are all with a separate company and possibly the only thing of great value, but still all owned by the same person.

Conspiracy Theories, as far as "they set the company up to go bankrupt from the start".

Well... have a look at this:
Twist! OnLive Bought - Gets Substantial Funding

It's real simple... they were up to their necks in debt... they did what they had to do to save the company, by forming another one. Most of the employees will be hired back.

Exactly what I said in the other thread - they sold the assets and kept the debt. Similar to what happened when NVIDIA bought 3dfx.

It's shady, but it happens. What will make it unreasonably shady is if the original owners still have stake.

As for the employees losing their stock, again, this isn't uncommon - we've all seen the Social Network and saw that guy now in Singapore get massively diluted. It happened at the first company I ever worked at - a shady mortgage startup. We all got stock one day because the guys that founded us, were hands off, and desperately tried to sell us knew morale was insanely low. The stock didn't help. When they were sold we were told the stock had no worth. We'd already known that.
When a company sells out while essentially failing those stock options become worthless. It's only very successful companies that turn the librarian into a millionaire. Worth remembering if a startup comes to you - it's a huge gamble and your offer may make you a millionaire on paper but odds are that paper will crumble away before being realized.
 
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