2008 Year in Review: Layoffs hit online video industry

The final two quarters of 2008 saw unprecedented drops in financial markets, followed by cutbacks by companies across the country. Unfortunately, the online video ecosystem was not spared. Brightcove, Netflix, Veoh, Akamai, Real Networks and others had to trim staff to adjust to the deteriorating climate.

While cycles of growth and contraction are inevitable in any field, it's never good to see companies in a quite new, growth market like online video having to cut back before they've reached anything close to their full potential.

Analyzing the cutbacks, some were obviously due to struggling companies necessarily cutting back to stay afloat, such as Veoh and Real. Others appeared to be more strategic, including Brightcove, Netflix and Akamai layoffs.

Most online video companies are in the start-up, boot-strapping phase, so reducing payroll even by a few positions can be a risky make or break move. Near-term expenses are decreased, but at what cost to overall talent and productivity?

It wouldn't be surprising, only slightly disheartening, to see if more layoffs in the first few months of 2009 as companies deal with a trepid marketplace. The extent to which layoffs continue in Q1 2009 will be a leading indicator to the market's overall health and prospects for the rest of the year. 

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