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BitTorrent Lays Off 40 Employees

The company that pioneered the popular “torrenting” file transfer method has significantly reduced its staff.

BitTorrent Lays Off 40 Employees
[Photo: Flickr user Michael Fleshman]

BitTorrent laid off 40 of its 150 employees on Thursday, a source told Fast Company. The cuts were made in an effort to streamline business and focus on a smaller suite of products, according to sources speaking to BuzzFeed.

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Update 12:45 p.m. ET: BitTorrent PR manager Kevin Fu told Fast Company: “We’ve recently realigned resources based on a regular evaluation of the business. Regrettably, this did include some employee departures. The business however, remains healthy, profitable and growing.”

BitTorrent, which makes the popular BitTorrent file transfer protocol that transformed the way large files are shared online around the world, has seen extreme increases and decreases in staff before, going from 60 employees down to 10 and then rocketing up to a staff of 150, as Fast Company writer Sarah Kessler described in her March 2014 story about the company. Despite major upheavals, the company remains profitable thanks to a revenue stream it has secured by bundling spammy toolbars into BitTorrent downloads.

From Kessler’s excellent feature:

About 800,000 people download its clients a day—two premium, two free—and many don’t notice an option in the free versions asking whether they’d also like to install a toolbar that switches all of their default browser searches and home pages to Yahoo or Ask.com. When a user allows the switch, BitTorrent (the company) gets paid.

This has blessed BitTorrent with a kind of startup immortality—like a teenage zombie from a high-school movie, old and experienced without ever quite growing up. With its clients’ 170 million users and a steady revenue stream, the company can scrap nearly everything and still be guaranteed the revenue needed to reboot. Right now, it’s in growth mode as it tries once again: Its staff has grown from 70 to 150 employees in the past two years, and the company moved into an office space that can accommodate many more.

Founder and former CEO Bram Cohen, a computer programmer by trade, created the BitTorrent file transfer method in 2001. Instead of one computer directly downloading a single file from another, BitTorrent has one computer download tiny pieces of a file from computers all over the Internet and then assembles them into a whole file at the end. It soon became a popular way to download large files, like movies, rapidly and obscurely–and since Cohen released the BitTorrent transfer method as open source, “torrenting” became the de facto method for downloading software illegally without leaving much trace. The most popular torrenting site in the world, The Pirate Bay, relies on BitTorrent, and Facebook, Etsy, and others use the software to update their websites. Today, BitTorrent accounts for about 10% of all Internet traffic.

BitTorrent has also made major gains in the past year with its Bundle product, which uses BitTorrent’s peer-to-peer large file sharing technology to distribute music and film. The company released its first two feature films this year, David Cross’s HITS and Drafthouse Films’ Spring, and has been used by musicians including Madonna and De La Soul to release material.