Update: Veoh Lays Off 25, Shapiro Takes Over as CEO

UPDATE: We spoke with Veoh for official comment on this morning’s news:

  • 25 people are being laid off. That leaves the company with 45 employees.
  • Veoh founder (and original CEO) Dmitry Shapiro is taking over as CEO and Steve Mitgang is no longer with the company.
  • Veoh is focusing its efforts on the Video Compass, which the company says is getting 25,000 new users a day. Veoh plans to monetize the add-on through advertising, though no other specifics were provided on exactly how that will work.
  • Veoh.com will still be supported. Shapiro said Veoh.com generates “millions” in revenue each quarter.

Shapiro wouldn’t provide any financial information and would not speak as to how far its last round of funding will take the company. Original post follows.

We’ve confirmed a VentureBeat report of major layoffs at Veoh. According to our source, more than 40 people, close to half of the company, are being let go today, (see update) including some of the management.

Veoh will apparently be refocusing on products like its new Compass toolbar — a video search and discovery product which we called “the opposite of a video portal” when it came out. Compass is cool (I still have it installed — a rarity!) but it’s hardly enough to build a company around yet. The add-on was only listed on Mozilla less than a month ago; Veoh was founded in 2004.

Veoh laid off 20 percent of its then-110 employees last November. It also shuttered a Russian office and let go of its 15-18 employees in October. Perhaps the first outward sign of trouble was when the company blocked some international access to its site last June because it could not recoup bandwidth expenses in less popular regions.

But it’s not like Veoh was petering away slowly. The company has had more resources and strategic relationships than most startups could ever dream of. Also last June, Veoh raised $30 million from Intel (s INTC) and Adobe (s ADBE). That brought its total investment to $69.5 million from those two companies, along with Shelter Capital, Spark Capital, Goldman Sachs, Michael Eisner’s Tornante Company, Time Warner Investments, Jonathan Dolgen and Gordon Crawford.

We’ve been in contact with spokespeople at Veoh and expect to speak with the company shortly for official comment.