The founder and CEO of the OnLive cloud gaming service, Steve Perlman, has departed the company to pursue other projects. Gary Lauder, lead investor in OnLive and Managing Director of Lauder Partners LLC, will replace him as chairman. Charlie Jablonski, former head of OnLive operations, will take the position of COO and acting CEO.

This announcement comes in the wake of recent mass layoffs at OnLive and its insolvency proceedings, done through a legal tool called Assignment for the Benefit of Creditors. It is an alternative to bankruptcy, allowing a company to sell its assets to another legal entity, which then becomes responsible for running the business. Assets sold by OnLive were used to form a new company under the same name, with the side effect of rendering stocks in the “old” OnLive worthless.

After the transition, the new company hired back only about sixty employees from the original two hundred that were laid off. Critical departments were reportedly shut down, including teams responsible for preparing new titles for release on the platform. The change in management occurred when employees stated that they’d return to the company only if Steve Perlman would resign as CEO.

At this point, OnLive’s future is uncertain. Although the company is under new management, it remains to be seen if it can regain investor confidence and popularize its services among gamers. It will certainly have to face strong competition, most importantly from its main rival, Galkai, recently purchased by Sony Entertainment for $380 milion.

For those interested in a detailed overview of the events leading to the insolvency of OnLive, The Verge offers an excellent report, from the unveiling of the service at the 2009 Game Developer’s Conference and the enthusiastic reaction of the press, through gradual worsening of the company’s condition as a result of failing negotiations with investors and publishers, to the massive layoffs and painful transition in 2012.

[via The Verge]