Daily Daze

After Big Layoffs, BuyWithMe Being Acquired By Gilt Groupe, Slashes More Staff

gilt buys bwm After Big Layoffs, BuyWithMe Being Acquired By Gilt Groupe, Slashes More Staff

These sale prices are nuts!

Betabeat has learned that Gilt Groupe is in the final stages of acquiring the troubled daily deal site BuyWithMe, which laid off more than half its staff last week to sweeten the deal for potential buyers. The sale is a win for Matrix Partners, who has invested in both firms, and been backing BuyWithMe across three rounds and $30 million in venture funding.

BuyWithMe will officially be part of Gilt starting Nov. 1. The remaining sales staff who were left after last week’s layoffs will be let go with one weeks pay. Gilt gets a lean company consisting largely of technology, a few executives, a large email list of customers and merchants partners in cities around the country.

At one point earlier this year BuyWithMe was consisered the number three player in the daily deal space after Groupon and Living Social. But it stumbled as competitors flooded the market and customer acquisition costs skyrocketed.

After the big layoffs last week, sales staff were asked to take a 25% pay cut. The idea was that after the acquisition, the garnished wages would be made whole. But that is no longer the case, indicating that the purchase price was fairly low.

On a conference call last night, employees also peppered CEO Jim Crowley with questions about unvested stock options. Typically in an acquisition vesting can be accelerated to compensate employees. But Mr. Crowley refused to answer these questions, and it seems like employees may be left holding the bag.

The assets from BuyWithMe will likely be folded in Gilt City, the daily deals offering from Gilt, which yesterday was announced as one of the 14 new partners for Google’s daily deal offerings. Can you smell the consolidation?

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Comments

  1. Anonymous says:

    Let me get this straight. Buywithme’s executives spend millions of dollars on acquisitions. They then lay off more than half of their workforce to “better support their customers and merchants”. Then they get rid of the rest of the workforce and sell to Guilt for some miniscule amount and those same executives are the only ones left with jobs? Wtf.

  2. Anonymous says:

    Whew, thank  God I didn’t drink the koolaid 1.5 years ago when they offered me a job.  I knew they were weak but it seems they’re corporate low lifes too

  3. anonymous says:

    Let’s get it right.  The email that was “leaked” by accident was no accident at all.  This was calculated manipulation in its finest by Andrew Moss, the founder of BuyWithMe.  This email forced CEO Jim Crowley to address the unrest and rumors sooner rather than later.  The Gilt acquisition was already in final stages and one of the conditions was to trim the workforce before Gilt would move forward.   The sales staff that remained were told that the potential acquisition was a positive thing for them because the company looking to acquire BuyWithMe did not have a large sales staff.  They were lied to and will meet the same fate as their former colleagues last week.   This is corporate greed at its best.   Andrew and Matrix will benefit along with some executives, everyone else loses.  We could look at the glass as half full…..1 week severance compared to none!  Yippee!!

    1. AnonymousToo says:

      Hey – this is far from accurate to say the Email was leaked on purpose and in any sort of benefit, especially for Andrew Moss who from what I gather is working night and day to help assist employees with jobs and recommendations moving forward.  The Email was a clear mistake by an employee in the company at a time of large decisions being made – one of them the fact of finances are needed to support the number of employees being staffed and layoffs were inevitable as a next step – whether it was maintaining a lean company for a few months or selling immediately. Corporate greed is involved here – from Jim Crowley who had no plan to move the company on without further funding. He preferred to leave it dry and leave the employees who put their heart and soul into it as well in the dark. The company was filled with passionate, hard working, honest people – of all levels – including executives and founders. There’s no reason to shame anyone else at BuyWithMe but Jim Crowley who lead the company into the ground without ever looking back and now not looking anyone in the eye. 

      1. Anonymous says:

        Jim Crowley is by far the worst executive I have ever seen in action. He is a terrible orator and has zero leadership skills. Looks great on paper, but that’s about it.

  4. Rachel M says:

    If anyone needs an invite to Gilt Groupe I can let you use my link. I’ve given away as many as I can to friends and I’d rather let others use them than let them go to waste. http://www.gilt.com/invite/wpd