Updated: Babelgum Scaling Down By Closing HQ, French Office

Is billionaire investor Silvio Scaglia‘s inclination to keep bankrolling Babelgum running out? The video service is shutting its Dublin HQ and Nice office, paidContent:UK has learned and confirmed.

We also heard its New York operation is being wound down, but the company says the office there will stay open. Update: Word reaches us that NY-based EVP and chief revenue officer Michael Rosen has left; his bio has been removed and sales queries are instead directed to Seth Graeber.

Operations from the other two offices will be consolidated across Babelgum’s London, Milan and New York offices. Staff were notified on Thursday. The company isn’t giving us a number on job losses.

— When Babelgum was moving up the gears in 2007, the Dublin office employed over 50, and Babelgum intended to employ more than 100 there.

— Nice was Babelgum’s primary development centre, responsible for its original P2P system, desktop app and iPhone app; it employs around 15, according to a source. Milan only has a third of that and there’s concern development may now need to slow if staff there are to take on the extra systems work. Still, much of Babelgum’s tech work has been done, the rest is about content.

Babelgum tells paidContent:UK: “This decision allows Babelgum to streamline its approach, improve its cost effectiveness and ensure its continued growth in future years. Babelgum will keep developing apps on a large scale from other locations (Milan, in particular, where a large part of its tech team has always been based). Despite the current economic downturn, Babelgum remains one of the very few aggressive players in the new media market.”

The move has come swiftly – it was only on October 27 that Babelgum advertised for a senior sysadmin in Dublin. Dublin-based COO Michael O’Callaghan left 12 months ago and, according to the company’s exec list, hadn’t been replaced.

It looks like a wind-down of the company or a big cost-cutting exercise. One rumour is Scalgia may move Babelgum away from video distribution and focus more on content production.

Scalgia, rich from selling Fastweb to Swisscom, started Babelgum with scientist Erik Lumer in 2005 and is thought to have invested tens of millions of his own euros each year.

But Babelgum has had to work hard to differentiate itself – dropping its P2P desktop app for a Flash web player, focusing on five key content channels and particularly courting independent film and documentary makers with a