Vudu Layoffs a Sign of Doom?

The Internet set-top box herd may be thinning, as Vudu laid off roughly 15 percent of its staff on Friday, including co-founder and (former) VP of marketing Patrick Cosson. According to CE Pro, the online movie delivery service laid off 16 to 18 of its 100-person staff.

A remaining employee dutifully toed the company line to CE Pro, saying the layoffs were “just a normal process” for a startup that grew quickly, and the web site lists 19 positions being hired at the company. But we’ve heard this almost exact same song and dance before (Akimbo, anyone?).

Aside from the layoffs, Vudu’s recent actions don’t instill much confidence in the company. Adding pornography, a 99 cent bargain bin and slashing $100 off the product price don’t exactly scream stability and a successful existing business model. Not to mention that Vudu faces competition from the likes of Apple TV, Amazon and Netflix.

But as Dave Zatz points out, demises in the consumer electronics space are slow, so don’t junk that Vudu box yet (especially when the service will be adding 1,000 HD titles soon). But the writing may be on the wall for the company. As we’ve pointed out, Silicon Valley should get out of the hardware game.