A source confirmed to have been affected by today's OnLive company shift has stepped forward, telling Joystiq that staff were shocked when company CEO Steve Perlman announced OnLive would be restructured. Employees had joked, before the 10am meeting, that perhaps the company had finally been purchased. They thought the news would be good.
Our source, who wished to remain anonymous, said that Perlman "showed no remorse" when detailing the decision to staff and explained to laid-off employees that any vetted stocks were worthless – as OnLive is "nowhere near going public" – no severance would be offered, and all flexible spending accounts were gone. [See update below]
At 2pm today, a second meeting was called for employees that received an offer letter to remain with the restructured company, under an undisclosed investor. Only those with offer letters know the company behind the move, our source said. Prior to the news, OnLive employed 180 to 200 individuals. Less than fifty percent of staff – and our source speculates closer to twenty percent – received an invitation to the new company. Employees that remained included management and select members of the operations and engineering teams required to keep the service moving forward.
Despite its claim of two million users, our source says that the average peak amount of concurrent users was around 1,800. The two million number accounts for anyone who has signed up for the service; actual usage was remarkably lower.
Following the meeting, management told laid-off staff to pack their belongings, return any key cards, and exit the building by 4pm today. When reporters were spotted photographing the building, management requested laid-off employees to exit through the garage and not the front door.
Multiple offers were made to purchase the company over the last few months, including one from Hewlett-Packard. Company management said it was investigating offers; however, it was widely known to employees that Perlman was looking for an offer in the range of $1 billion.
"Steve got all excited when Gaikai got acquired, because it kind of validated everything we did," our source told us when asked if Sony's acquisition of the streaming service company changed an attitude in the office. At around the same time Sony made the acquisition, OnLive's patent for gameplay streaming went through. "So all of a sudden, Steve was like 'When the time is right, we're going to hit them with our patent because we're not going to let some two-bit company ride our coattails,'" the source claimed, explaining the threat was made to the entire company soon after Gaikai was acquired.
"I guarantee that some time in the future, Steve is going to go to court and sue the shit out of them for stealing our ideas," the source said.
Joystiq has contacted OnLive regarding the allegation of a potential patent scuffle.
Update: Joystiq has learned that laid-off employees will keep their benefits package until the end of August, with the option of opting into COBRA on September 1. Additionally, laid-off employees that aid in the transition to the new investor, may be rewarded in company stock; however, it should be noted that OnLive is still not a publicly traded company. In separate meetings, laid-off OnLive employees received a termination package, which included a check for their last week of work and approved, unpaid PTO.
Update 2: Though the new owner of OnLive has yet to be revealed, the new investor appears to be an individual "impressed" with what OnLive has been able to accomplish and not a major company – this according to Perlman during today's internal announcement meeting.
Update 3: Another source has come forward to dispute the claim that OnLive CEO Steve Perlman showed "no remorse" when announcing the company's restructuring. "Steve said he was very, very sorry and shouldered all the blame at the company meeting this morning," the new source – also requesting to remain anonymous, but confirmed as an employee – told Joystiq. "Steve has always worked harder than anyone at OnLive and therefore has my respect as well as many others within the company," the sourced, who was also let go this morning, added. We have changed our headline address this conflict.
Have any additional information about today's OnLive restructuring? Please contact xav [at] joystiq [dot] com.
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