Layoffs spark new direction for video-chat startup Spreecast

A staff shakeup is sending group video-chat provider Spreecast in a new direction.

Two weeks ago, the startup quietly laid off half its team. With a “new focus,” Spreecast plans to invest in “paid subscription features,” the company tells VentureBeat.

News of the layoffs was first disclosed to VentureBeat by an anonymous tipster, who also suggested the firm is “in danger of running out of money and may have to close.” A Spreecast spokesperson verified the layoffs by email but firmly denied that the startup is running out of funds.

Here’s the company’s statement, in full:

We laid off about half of our team last week. We made a strategic decision recently to put more focus on our paid subscription features. This new focus meant we could trim parts of the team who were working on other areas. We are not running out of cash. We’ll be announcing the changes to the paid subscriptions in the coming months.

Spreecast refused to comment any further on its new direction. As of today, Spreecast has 31 employees publicly listed on LinkedIn.

Last we heard from Spreecast, the firm told us it was working on a large-scale redesign set to launch April 21. At the time, Spreecast hoped to connect “people through conversation” with “new interactive features,” the company told us in April. Spreecast’s redesign launched on schedule, taking inspiration from Reddit and YouTube.

The way Spreecast currently pitches its service suggests where the company is headed. The firm advertises that it helps media and entertainment brands “maximize engagement with [their] audience.” Spreecast already counts numerous high-end brands as users, including ESPN, VH1, and MTV.

Launched in 2011, Spreecast is the brainchild of Jeff Fluhr, the founder of event ticketing startup StubHub. StubHub sold to eBay in 2007 for $310 million.

The change in direction may end Spreecast’s efforts to compete with Google’s Hangouts video chat service. Spreecast has raised $13.3 million in funding to date.