OnLive confirms it has reorganized

[Updated at 5:58 p.m.: OnLive confirmed late Friday afternoon that its assets have been sold into a newly formed company in a complex financial reorganization.

As part of the transaction, OnLive had to officially lay off its staff and re-hire some workers into the new company. The San Francisco firm sparked a flurry of online speculation Friday morning when it announced its plans internally. Reports varied: Some said OnLive was laying off its entire staff and shutting down; others said it was firing half of its workers.

It remains unclear how many OnLive employees actually lost their jobs.

An OnLive spokeswoman declined to elaborate beyond this company statement:

“The assets of OnLive Inc. have been acquired into a newly formed company and is backed by substantial funding, and which will continue to operate the OnLive Game and Desktop services, as well as support all of OnLive’s apps and devices, as well as game, productivity and enterprise partnerships. The new company is hiring a large percentage of OnLive Inc.’s staff across all departments and plans to continue to hire substantially more people, including additional OnLive employees. All previously announced products and services, including those in the works, will continue and there is no expected interruption of any OnLive services.�

A source within the company said that OnLive’s founder and chief executive, Steve Perlman, remains at the helm, and that OnLive’s top management team remains intact. None of the company’s business relationships were affected by the reorganization, said the executive, who was not authorized to speak publicly.]
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