Boulder, Colo. - DataPlay reported today that the round of layoffs the company experienced three weeks ago would not negatively impact the roll out of DataPlay based hardware and media.
DataPlay quietly let go about 120 employees in July slashing the company's payroll by 50 percent, a company spokeswoman said. The company was forced to make the reduction in order to due to financial constraints caused by the very tight venture capital market. The cuts were made across the board and no additional moves are planned.
'The reality is the financial markets are tight and we needed to do this to sustain our operation,' said Todd Oseth, DataPlay's senior vice president for marketing and business development.
Oseth added that DataPlay will ship the same number of DataPlay drive engines this year as originally planned, but will cut back on the amount of internal, in-depth research. In addition, the company will lean on its partners like Imation and Toshiba to pick up some of the financial slack, he said.
Oseth said the iRiver brand DataPlay hardware devices are rolling out to a variety of retailers across the country, including CompUSA and J&R. Another model selling under the Classic brand will ship in a week, about three weeks later then scheduled.
'I see this problem as short term. We believe that the DataPlay engine and media are a compelling technology and part of our focus is to show our customers and the consumer electronics industry that iRiver can develop leading edge products and deliver new technology to the market quickly,' said Jonathan Sasse, iRiver's marketing director.
Evolution, the third firm that had committed to rolling out a DataPlay device this summer, is taking a more cautious approach. The company originally was to be the first on the market with a model, but Brad Deifer, Evolution's CEO, said he has pulled back and now intends to see how DataPlay's current situation shakes out before introducing any product.
'We have a unit ready to go, but there were so many things with DataPlay that did not happen that we want to see where it goes first,' he said, adding the company might make enter the market in October. The model in question would be branded with the MTV logo through a licensing deal the company has with the music video network. The company markets several portable audio products in conjunction with MTV.
Deifer added that the MTV have proven so popular that Evolution must focus its efforts in this area at the expense of DataPlay.
The pre-recorded music from BMG, EMI and Zomba are expected to start this fall. BMG's schedule has its first 11 DataPlay releases coming out on Sept. 24. These will include Sara Mclachlin, NSYNC, Britney Spears, and Brooks & Dunn.