Fourteen employees at Priatek lost their jobs this month as the St. Petersburg advertising technology company shifted its focus from research and development to operations.
Founder and chairman Milind Bharvirkar confirmed the layoffs in a wide-ranging interview about his new role, a blockchain venture and moving forward after setbacks.
The changes at Priatek come as the firm is about to formally launch gaming kiosks that feature digital ads in malls throughout the New York metro area.
The games are designed to be played by retail shoppers who can win prizes or tokens for gift cards. Gamer-players fill out surveys that provide data to advertisers.
“We are shifting from a company that’s been doing development to launching,” Bharvirkar said. “We had to shift resources to focus more on the launch in New York which revolves around sales and operations of these devices.”
The 14 workers were laid off on Nov. 1, according to a person who lost a job and spoke on background.
That’s the same day the St. Pete Catalyst reported Priatek’s leadership was changing, with former Tampa Bay Wave entrepreneur-in-residence Allen Clary poised to join as president, a role previously held by Bharvirkar. Bharvirkar said Clary was not involved in the layoffs.
While the gaming industry is volatile, the former Priatek worker was caught off guard.
“It was a surprise, but not a hard-hitting surprise. It felt like it would have happened eventually. I was just hoping the job would ride out a bit longer,” the former worker said. “It felt unexpected that day. We were working and a co-worker came in and said he got laid off and the next thing I know there was a knock on the door. It was one of the higher-ups and she told me and another person that we got laid off, and a bunch of other people got laid off after that.”
The former worker said the company offered severance and recommendations, and made it clear to those laid off that it wasn’t about their work performance.
“From the sound of it, they were going to stop work on the app, and focus on VendXOR,” the former worker said.
VendXOR uses blockchain technology that records transactions and tracks prizes. The company was launched as a separate operation from Priatek, according to a white paper on the VendXOR web site, but talks are underway to change the structure, Bharvirkar said. It’s too early to talk about the specifics of its relationship to Priatek, which is evolving, he said.
It’s unclear about the role cryptocurrency, which can be a very volatile investment, will play in the work going forward.
“VXOR will be the first cryptocurrency to reach the hands of hundreds of thousands, to millions, of consumers that would otherwise never own a cryptocurrency or a crypto wallet address,” the white paper said, but Bharvirkar said no cryptocurrency has been created or sold, and the company is simply focused on its blockchain technology.
Bharvarkir is the majority shareholder at Priatek, controlling 55 percent of the stock, he said. That’s why he scoffed at speculation that he said he has heard suggesting he was forced to step down as president.
“I voluntarily did this. Nobody forced me, nobody fired me, this was my choice and anyone telling you that is lying to you,” he said.
There has been board turnover at Priatek, as the company shifts from R&D to operations, but “everything is fine with the board,” he said.
He said his focus going forward is selling Priatek’s gaming systems.
“I cannot run the company and run sales simultaneously. A founder has to make a decision whether he’s going to be an internal CEO or an external CEO, and I’ve chosen to be external,” he said. “I’m the visionary who built the product, I’m the guy who gets on stage and talks to reporters, and I tell them what the value proposition of the product is, and my strength is eliciting customers and developing a product that makes sense, that works for them. Allen is going to be an excellent day-to-day president.”
Like many entrepreneurs, Bharvirkar has had his share of successes and failures. Global VR, a video sports game company he launched in Silicon Valley two decades ago, sold for more than seven figures, Bhavirkar told the Tampa Bay Times in a 2015 interview, but a followup venture in Florida failed, in part because of the recession.
He filed for personal bankruptcy in 2011, and a year later a federal bankruptcy court in Tampa approved a plan to pay creditors. One of those creditors, SunTrust Bank, planned to garnish his wages, according to filings in Hillsborough County Circuit Court. Bharvirkar initially won an exemption from the garnishment, but on Aug. 21, a Hillsborough County Circuit Court judge ordered the garnishment take place.
Bharvirkar said those financial issues had nothing to do with his job shift at Priatek.
“I did a good job of paying off my debts and I’m going to move forward and honor anything I have current,” he said. “It’s the life of an entrepreneur. I’ve felt incredible successes and I’ve felt the bite of defeat. We learn and we grow from them. I don’t think I would change the past. It’s made me who I am today.”