LimeWire Laid Off 30 Percent Of Staff Following Shutdown

Not a surprise: Following a court injunction that turned off its primary file-sharing service, LimeWire laid off a third of its staff last week.

A bit of a surprise: The company insists that it can keep its remaining employees working on a new music service.

LimeWire confirms that in the wake of last week’s shutdown, it let go of 29 of its 100-person workforce. Here’s CEO George Searle’s statement:

Following the court-ordered injunction, we reduced our work force to extend our runway for bringing our new music service to market.  Letting go of colleagues is never easy.  If we could have brought about another solution, we would have.

I don’t know whether LimeWire’s new service, which the company has been referring to internally as “Grapevine,” will also be based on peer-to-peer technology or not; I should have more on that later. But I do know that the service won’t have any hope of working unless it can get the big music labels to sign on.

That’s theoretically possible, because LimeWire and owner Mark Gorton have talked with the labels about that sort of thing before. But they’ve talked for a very long time, and have never reached a pact in the past.

For now, at least, the labels appear to be set on extracting a very large chunk of Gorton’s hide, via the damages phase in their federal court case. That’s supposed to kick off in January.