[breaking] Xtranormal lays off 36; half of its staff

By Heri Nov 25th 2008 in Business

Xtranormal (see beta review) which launched with much fanfare a little over a month ago has laid off today 36, which is half of its staff.

Xtranormal invested heavily in research & development efforts in the past year, understandable since they were tackling a new challenge, user-produced videos, but this mass layoff shows lack of planning, focus & guidance from its CEO & founder, Richard Szalwinski, who also did previously Discreet Logic. Many at xtranormal expected him to lead product development but he didn’t. As sources of money & funding disappear, Xtranormal is now forced to downsize its staff. I guess xtranormal’s investors are defaulting on committed payements due to markets crashing left & right, although you have to take that with a grain of salt.

Layoffs are hard times for a company, with remaining staff having lower morale. My thoughts goes to existing and ex-employees, hoping they’ll bounce back.

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Comments

Éric Malenfant November 25, 2008

A small correction here. The article says:

Richard Szalwinski, who also did previously Softimage

IIRC, Richard Szalwinski did Discreet Logic, not Softimage.
Heri November 25, 2008

Thanks, Éric, changed it.
Technology news - Techvibes Blog November 25, 2008

[...] Montreal Tech Watch is reporting that Montreal startup Xtranormal has cut 50% of their staff. [...]
Patrick November 25, 2008

“but this mass layoff shows lack of planning, focus & guidance from its CEO & founder, Richard Szalwinski”

Possible. There’s also the current and worsening Econopolypse affecting everyone, think that might have an effect? Are the Googlers slacking 1000 also showing lack of planning, focus and guidance?
Heri November 25, 2008

I heard Google is slacking 10000 not 1000

when you layoff 50% or one third of your workforce, imo there’s a problem with the company’s leadership

also this section was not related 100% to the layoff, this has been talked amongst xtranormal companies
j2 November 25, 2008

Maybe. Guy Kawasaki opines that cut-deep-cut-once is a better stratagem than death by a million cuts.

I think the next actions are more important than todays.
Richard Gratton November 25, 2008

Hi all,

Xtranormal had three projects on the go: (i) the website, xtranormal.com, (ii) a desktop product planned for release next spring, and (iii) a longer term and much more technically challenging project that was in research phase.

Given the economic climate, we have to use our funding on projects with a shorter path to revenue. Therefore we decided to suspend the longer term project.

The layoffs directly reflect this decision in that the teams responsible for the web site and the desktop product remain intact and committed to meeting their objectives and bringing successful products to market.

Richard Gratton
Director of Product Management
Xtranormal, Inc.
Heri November 25, 2008

Richard,

thanks for the details. Good luck for you guys for the website and the desktop products.
Jonathan Belisle November 25, 2008

Xtranormal have some enormous skills in Semantic Recognition and thus could come up with very powerful innovations in the year to come.
Annonamous November 26, 2008

What a bunch of lies, they never did any focus groups, no business plan or marketing plan…poorly run company all the same tell tale signs of the last company Richard did and went bankrupt. The remaining staff are now activley looking. Here is a company that will launch a luxury product in the worst ecomonimc recession since the depression, another smart move.
Benny November 26, 2008

What a pack of lies..this company did no focus groups, biz plan or marketing plan..no surprise that after 3 years they end up here. The remaining programmers are now activley searching for something better, good news for ubisoft and others. They decided that in the worst economic crisis since the depression they would launch a luxury consumer product..another smart move. This company has all the same tell tale signs as the last company Richard lead into failure..don’t blame this on the VCs blame this on bad management period
Alex G November 26, 2008

I have to put this one in the same basket as Capazoo. Doomed to fail, waste of money, another business adding a stab wound in Montreal’s startup reputation and making it harder for other local entrepreneurs to start up.

First of all, a Montreal start-up without a true revenue model and without sales in the pipeline and a BETA stamp on their site simply can’t justify having over 70 employees on board.

Second of all, I can’t imagine why oh why would anyone in the world want to watch those crappy robot voiced cartoons that all look the same.

And now the economic climate is to blame? Come on! Like there is ever a proper economic climate for senseless burning of massive amounts of cash.

Richard, whatever you say, 35 people are without work because of their leader’s “mistakes” (to remain civil). If I were you I would study the Capazoo case near its end and try to learn from their mistake.

In other words, learn to swim, your ship is sinking.
George Favvas November 26, 2008

Heri,

I’m not sure this is necessarily a result of lack of planning.

As j2 said, cut-once-cut-deep is often the way to go, but it takes guts to make such a bold decision.

Look at slide 49 here: http://www.techcrunch.com/2008/10/10/sequoia-capitals-56-slide-powerpoint-presentation-of-doom/
George Favvas November 26, 2008

@Alex G:

Capazoo was a fraud from the start.

Xtranormal is a unique and innovative product. Ultimately the market will decide if it succeeds or fails, but it would hardly be a blight against Montreal if it fails.

It’s inevitable that we’re going to have failures if we’re going to have successes.
Daniel CAUNE November 27, 2008

“The remaining programmers are now activley searching for something better, good news for ubisoft and others.”
[Posted by Benny, November 26th, 2008 11:19 am]

Benny, your statement is pointless. As a member of the staff, as many others, I believe in Xtranormal’s adventure. You wrongly interpret the situation. Xtranormal suspends one of its activity to keep going to some others that are expected to better fit the market in a mid-term period.

Regarding whether I’m (as a remaining developer) “actively searching for something better, (…) Ubisoft”… ha ha ha, are you kidding my friend?

Before you answer a gratuitous answer, just to mention that I have strictly no option, no financial interest in Xtranormal, but technical interests.

“If you can’t read it, you can watch it”: http://www.xtranormal.com/watch?e=20081127000132429
Heri November 27, 2008

i think publishing this was finally an error. There are too many opportunities to misunderstood the words behind the original post.

this is just the sort of times i wished xtranormal had a public blog with more transparency on what they’re doing to defuse stuff like this.

comments closed
Montreal Tech Watch November 27, 2008

comments closed here http://tinyurl.com/6rgxtd 2nd time this has been done; hope it’s the last one
Montreal Tech Watch » Coming back to Xtranormal’s case — the adventurous life of a startup December 02, 2008

[...] Last week, Xtrnaormal layed off 36 of its staff, as reported in this article. [...]