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AtomShockwave lays off most of staff

Facing a declining economy, AtomShockwave cut almost its entire staff Friday, according to company sources.
Written by Lisa M. Bowman, Contributor
Facing a declining economy, AtomShockwave cut almost its entire staff Friday, according to company sources.

At a meeting, employees learned that the company, which provides on- and offline games and films to consumers and businesses, will cut about 150 of 180 positions, sources said.

An AtomShockwave representative said the cuts were the result of a restructuring of the company and were done "to reflect the changes in the economy". The representative would not confirm the number of people laid off but said rumors that the company would shutter its Shockwave.com Web site are not true.

Employees who want to secure one of the 30 remaining positions at the company must reapply, a source said. Workers who were laid off will get about eight weeks of severance and a chance to buy their work computers at a discount.

The company said it would back away from acquiring new content and developing customized content and would instead focus on three initiatives: securing advertising and sponsorships from large brand-name companies, syndicating content, and developing its paid content program.

Like many companies facing the dot-com downturn, AtomShockwave has been exploring charging for content that in the past has been free. In May, the company announced a pay-to-play initiative featuring two online games packages, one priced at US$19.95 and the other at US$29.95.

AtomShockwave formed in a December merger of Macromedia spinoff Shockwave and Seattle-based AtomFilms. Earlier this year, AtomFilms closed its Seattle office as a result of the merger.

In March, the company said it had secured US$22.9 million in funding from investors including Macromedia, Sequoia Capital, JPMorgan Entertainment Partners, Arts Alliance, Intel Capital, Waterview Partners and affiliates. It also predicted it would reach profitability within the year, but Friday a company representative wouldn't specify a date "because it's too risky" in the current economic environment.

Under the restructuring, Mika Salmi will remain CEO of AtomShockwave and Rob Burgess will stay on as chairman. The representative wouldn't comment on the fate of the other executives.

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