Last Wednesday, Betabeat broke the news of impending layoffs at Gilt Groupe. Later that morning, CEO Kevin Ryan downgraded the estimates we had heard, telling AllThingsD that the company intended to “selectively trim” about 50 people from its staff of 900 over the next couple months.
Tipsters have written into Betabeat that some of those layoffs are currently underway. “People leaving. Sadness. Super uncomfortable work environment,” said one source who wanted to remain anonymous, adding, “General atmosphere is terrifying.”
Buy Together Die Together
Betabeat has been covering the layoffs at BuyWithMe since Wednesday, when more than half the staff, at least 100 people, were laid off without warning or severance. There has been almost no word from the company or its management. As a result, we’ve had to rely mostly on anonymous sources who know bits and pieces. But over the last 24 hours, we’ve been able to put together some big pieces of the puzzle.
The statement released yesterday by CEO James Crowley, that the company was reorganizing to best serve its clients and customers, was disingenuous at best. Numerous sources Betabeat spoke with confirmed that BuyWithMe is looking to be acquired by a larger player in the daily deal space, and has been for some time now. The layoffs were intended to make it a more attractive purchase.
How did BuyWithMe end up in such dire straights? Betabeat has heard from a source that not only did the company purchase six smaller startups in the last six months, burning through some of its capital, but it also took out a $10 million debt round from its backers that was never disclosed to the press. That goes a long way towards explaining how the company got to where it is today.
BuyWithMe wasn’t the only local company hemorrhaging jobs this week. Betabeat has learned that TheLadders laid off about 30 employees this week, across all departments.
“It was like Black Wednesday,” said the source of the overlapping job losses. However, where BuyWithMe let go of 55 percent of its staff, TheLadders downsizing was less severe, with seven percent of its 420 employees, according to our source who was familiar with the situation.
Until a month ago, TheLadders focused exclusively on the $100,000+ jobs market–its key differentiator in the market. The source said the layoffs were related to flat revenue growth at about $80 million, adding that the company’s two biggest expenses were people and marketing costs. “They already cut marketing significantly,” said the source, who called the job losses “cost cutting to reforecast budget due to lower than expected revenue growth.”
Updates about the list from a former employee at the end of the post.
Second update from a source on who determined the firing list.
A source familiar with the situation revealed more details about the layoffs at BuyWithMe yesterday that left 55 percent of its staff unemployed without severance or warning. “The founder came back yesterday and literally made a list of people he liked and didn’t like and whacked everybody he didn’t like,” said the source.
“He’s not giving them anything,” added the source. “They were getting zero severance, zero warning. It’s perfect for a massive lawsuits kind of thing, which they’re probably going to get.”
The founder of BuyWithMe, the group buying deals site, is Andrew Moss. On his Twitter bio, Mr. Moss describes himself as, “Value-minded venture investor, Founder of BuyWithMe.com, former hedge fund COO/GC/CCO.” The company has also cycled through two CEOs, including an interim president when former CEO Cheryl Rosner stepped down last December.
UPDATE: A source familiar with the situation says BuyWithMe founder Andrew Moss based layoffs on a list of employees he liked and didn’t like.
An employee of BuyWithMe who was laid off today, along with what he estimates to be about 55 percent of the staff, says the company went under because it got greedy.
“They were trying to raise a hundred million dollars at a $500 million valuation and there were no takers. If they had done a more conservative round, the company wouldn’t be in this kind of trouble.”
This employee says there is no hope of raising a round now and that the company is looking for a buyer. “They are hoping to just sell and get some of the value back.”