The tech giant's Screenblast venture reduces its work force by 30 percent--just after Vivendi announces plans to launch a similar site.
The unit has been reduced to 44 employees after the layoffs, which took place on Monday, according to a spokesman. He said the 23 laid-off staffers worked on the production side of the business.
"The reasoning (behind the layoffs) is that the original level of content production was predicated in part on advertiser support," said Don Levy, vice president of marketing communications for Sony Pictures Digital Entertainment. "It is a well-established fact that the advertising market is not such today to sustain the original levels of production."
Sony launched Screenblast last September, offering film and animation makers publishing tools to create video, animation and music and to share their work online.
The layoffs come as Vivendi Universal is planning to launch a similar site, dubbed MP4.com after its MP3.com music community Web site.