Telstra Owned Ooyala Lays Off 14%, Will Re-Invest and Rehire Outside Of OVP Business Line

Telstra owned online video platform provider Ooyala, laid off 14% of their workforce, or about 70 employees on Tuesday. This news comes from a memo that was shared with me that was sent to all Ooyala employees announcing the changes. While having to let people go is never good, in this case Ooyala is using the layoffs to re-focus their business. The company plans to re-hire about 7% new employees and will re-invest in their sales and operations groups, specifically for products outside of their OVP product line.

Since Ooyala was acquired by Telstra, the company has invested significantly in R&D for their online video product and will continue to be in that market. Ooyala is not exiting or shifting away from their core OVP business, but rather right-sizing their investment to ensure an equal level of resourcing across all three of their business lines. A big part of the company’s focus is now on selling an integrated suite of products that deliver personalized cloud TV, specifically their Ooyala Flex and Ooyala Pulse products. As a result, the company said in the internal letter that they, “had to reduce the number of jobs in our core OVP R&D organization to open jobs that will fuel growth in our new lines of business.”

Ooyala definitely got a bit too big when it came to the number of employees they had working on their OVP product line and re-focusing the business is a smart move on their part. The online video platform market is not as big as some think which Ooyala’s acknowledges in their memo saying the market is “becoming more commoditized by the number of competitors and large enterprises entering the business“. So making sure their workforce and investments are equal across all of their services, and realigning their workforce around that is a necessary step.

The company has never discussed revenue numbers but in a call I had last year with a Telstra executive, Ooyala was on a run-rate to do $100M in revenue by 2018, which would be about half the size of publicly traded OVP Brightcove.

Any Ooyala employees now looking for a job are welcome to send me their resume, as I often get asked by vendors looking to hire who’s available in the market.