BitTorrent calls reports of staff layoff 'inaccurate'

7:18 pm EDT August 7, 2008 - In a statement this afternoon which Valleywag ran in its entirety, a representative of BitTorrent called allegations that the company laid off most of its sales and marketing department "inaccurate," "irresponsible journalism," and "outright false."

However, the statement did say that employees were laid off. "Contrary to published reports, we reduced less than 20% of our team and those impacted were distributed across our organization, rather than focused on a single department," stated BitTorrent representative Lily Lin. "Also contrary to published reports, the layoffs were unrelated to any ongoing discussions to divest a portion of our business...While it is our policy to not comment on rumors, the company has indeed been involved in strategic discussions with potential partners who are interested in the BitTorrent online store. These discussions continue."

Lin went on to say the company is "seeing healthy demand" for its DNA service for Internet broadcasters, and expects that trend to continue.

In a separate story published later in the day, Valleywag went on to simultaneously characterize the state of affairs at BitTorrent as a "collapse" and to make fun of one of its own sources for the story, calling him a "tipster" and someone who had actually refused to say up front whether he was a company employee.

The update goes on to defend both the original story and BitTorrent's description of its status as equally accurate, saying that two company officials who were fired before, now find themselves un-fired. One of those employees, however, the update admitted, was a human resources manager and not in the marketing department.

Twelve of BitTorrent's 55 employees, which constitute its sales and marketing departments, have been laid off, according to a report which first appeared in Valleywag.

BitTorrent did not answer requests for confirmation of the job cuts, which Valleywag claimed had to do with its failure to sell its online media store to Best Buy for a rumored $15 million USD.

The retailer apparently backed off following a recent FCC ruling on file sharing, although other sites including TorrentFreak -- which apparently spoke with BitTorrent president and co-founder Ashwin Navin -- now claim the firings had nothing to do with the online media store at all.

BitTorrent may also be prepared to offer its "DNA" service for Internet broadcasters, proposed last October, for free. DNA had served a brief stint as a premium service to content providers. While BitTorrent had attempted to offer companies a low-cost method of delivery, it now appears that it may not have been selling well.

Conceivably, BitTorrent may be refocusing on the consumer portion of its business, which is what made its file sharing technology what it is today. BitTorrent had been fairly adamant in recent months about staying committed to the enterprise sector, but these recent moves now suggest otherwise.

Not everybody is viewing the layoffs -- assuming they're confirmed -- as a bad thing. As Alexander Muse wrote for the Texas Startup Blog, "Maybe these layoffs are a good sign, a chance for the company to return to its core function: changing the way digital content is stored and delivered."