Updated at 4:13 p.m. Pacific with a statement from Avos.

Avos Systems, the company created by YouTube founders Chad Hurley and Steve Chen, is laying off a significant portion of its workforce, sources close to the company told VentureBeat.

Avos isn’t exactly a name most people would recognize. The company creates mostly digital media services that have their own separate branding, such as video app Mixbit and bookmarking site Delicious, (which Avos acquired from Yahoo in 2011). But despite its founders creating the world’s most heavily trafficked destinations on the web, Avos’ services have mostly been duds. The company already shut down its digital magazine app Zeen back in November, and its relaunched Delicious site failed to impress long-time users.

The lack of traction is now forcing Avos to lay off nearly 80 percent of its employees and shut down its 18-person San Mateo, Calif. office, according to our source. It’s unknown if Avos’ New Zealand and Beijing offices will be affected.

“The bosses were more upset about it than most of the employees,” one source said.

In addition to the layoffs, Avos is also considering shutting down Mixbit — its collaborative video app that attempted to piggyback on the success of other short video services like Vine and Instagram. Staff resources have been reallocated to Mixbit in an effort to save the service, which so far has attracted only anemic user numbers. (Updated 5:35pm Pacific to reflect Avos’s statement that Mixbit is not shutting down.)

Mixbit being a failure is a particularly heavy blow to Avos due to Hurley’s and Chen’s background in creating video services. Also, Mixbit hasn’t even been around very long. The app only launched back in August, as VentureBeat previously reported.

The only Avos service that is seeing any consistent activity is Delicious, according to our sources. Although I can’t imagine Delicious’ activity is anything impressive these days.

We reached out to Avos multiple times for confirmation on both the layoffs and Mixbit prior to publishing this post, but failed to get a response. However, upon reading VentureBeat’s report, Hurley denied that Mixbit is shutting down via a Tweet.

“Mixbit is not shutting down,” Hurley said.

However, Hurley did not deny the layoff reports.

Avos later responded to VentureBeat with the following statement, denying that Mixbit is shutting down. The company also said the San Mateo office is relocating, but it didn’t provide any clarification about layoffs. We’re reaching out to our sources for further information and will update the post with anything new.

Here’s Avos’ statement:

“MixBit is most definitely not shutting down, quite the opposite. We’re really excited about MixBit and have been focusing our efforts around it.  You can expect many new features very soon. As for the San Mateo office, we’re not shutting down, just moving into a new space.”


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