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Verizon Lays Off 155 Employees at Go90 Division (EXCLUSIVE)

Team from acquisition Vessel charged with app rebuild

Verizon’s mobile streaming service Go90 is about to get a hard reset: The company laid off 155 staffers late last week, with most affected working out of the main Go90 office in San Jose, Calif., according to multiple sources.

Variety also learned that the streaming service will now be rebuilt by the team that came over to the company with Vessel, a company Verizon acquired last October. Go90’s San Jose office was largely tasked with product development, but also included some content operations and marketing positions.

Verizon confirmed the layoffs, but denied any strategy changes in a statement sent to Variety:

“Our focus with go90 and our Verizon digital media efforts are to fulfill our strategy of leveraging Verizon content investments, enhancing user experience and strengthening our advertising infrastructure. Fulfilling this strategy has resulted in some duplicative resources and has required organizational changes impacting 155 employees as we consolidate offices in Los Angeles, San Jose and New York. These changes are not indicative to a change in our strategy and we remain committed to rapidly enhancing our existing online video products and delivering new products.”

Verizon officially launched Go90 as a mobile-focused video service for millennials in late 2015. The service was meant to appeal to an audience that doesn’t watch traditional pay TV services anymore, and primarily consumes videos on their phones. The company spent heavily on live streams and exclusives, striking content partnerships with media brands like Vice, New Form Digital and others. However, the service never really caught on with its target audience, despite Verizon spending heavy on product development and marketing as well.

Early on in 2016, it still sounded like Verizon executives were playing the long game with Go90, with CFO Fran Shammo telling analysts on an earnings call that G090 likely wasn’t going to be profitable for another two years. But later that year, it became obvious that Go90 was failing, with partners telling Digiday that engagement was far worse than Verizon’s projections.

The future of the service now lasts in the hands of Richard Tom, the former Hulu CTO and Vessel co-founder who has been leading the Vessel team ever since the acquisition. He’s gained a lot of political capital since the acquisition and is seen within Verizon as someone who gets things done. A Verizon spokesperson confirmed Monday that Tom will lead Go90 engineering and operations as CTO of Verizon Digital Entertainment.

Tom had co-founded Vessel together with former Hulu CEO Jason Kilar in 2014; Vessel was a subscription video service for short-form content that tried to steal audiences away from YouTube by offering paid access to new episodes of popular web series days before those episodes were freely available on Google’s video service.

The big unknown is how any of these changes will affect Verizon’s plans for Go90 content. Faced with dismal app engagement, AOL started to show some of Go90’s content across its web properties in 2016. It’s possible that Verizon would continue with this strategy, and possibly expand that web audience if and when the Yahoo acquisition closes in Q2, while also targeting mobile users with a revamped app experience. Former YouTube and Vessel exec Ivana Kirkbride, which Verizon hired as Go’s Chief Content Officer last July, will continue to lead the company’s content operations from Los Angeles.

The layoffs also mark the end of a long-winded and at times dramatic story for Intel’s former OnCue team. The chip set maker originally hired the team to build an internet television service dubbed OnCue. That service never launched, and the OnCue team and assets changed hands as part of a $200 million acquisition in January of 2014.

Verizon is scheduled to report earnings before markets open Tuesday.

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