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UPDATE: A employee who was fired today calls to explain why the company went under. Story here.

UPDATE 2: Another ex-exmployee says the company blew its cash trying to buy its way to growth.

UPDATE 3: A source familiar with the situation says BuyWithMe founder Andrew Moss based layoffs on a list of employees he liked and didn’t like.

UPDATE #4: Here is the official statement from CEO James Crowley, sent out via a third party PR agency:

“BuyWithMe did have a significant reduction in staffing this week. We did this so the company is in the best position to continue to serve its merchants and members. As an organization we’re continuing to pursue our business and to support our customers throughout the country.”

This contradicts what Betabeat has heard from multiple sources, who indict BuyWithMe is looking to be acquired.

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Original story begins here:

Betabeat has heard that New York City-based group buying site BuyWithMe has laid off a large portion of their staff today. The company, which has raised $21.5 million so far from Bain Capital Ventures and Matrix Partners, had been on a acquisition spree, buying up six companies in the last six months.

The news began to leak to the public a few hours ago. DailyDealMedia ran a story about successful companies in the daily deal space and mentioned Scoop Street, which was acquired by BuyWithMe in August. An anonymous comment declared:

"I'm a former BuyWithMe employee and I was laid off today. The company was not able to raise money in time due to their incompetent CEO, and founder Andrew Moss. There obsession with being the 3rd player, and emulating the giants in the industry led them to making decisions based on some delusional greedy dream. Andrew Moss has no vision and is incapable of innovating. BuyWithMe is a prime example of a company that exists solely to benefit a couple of connected individuals. They are not about the consumers, the merchants, or the team. At this time BuyWithMe is laying off 75% of their workforce in a last ditch effort to make these assholes money."

Betabeat confirmed with a source that there were large scale layoffs at the company today.

The news come one day after it was reported that Groupon will be holding its IPO roadshow, despite controversy over their accounting and finances.

Another comment on the same article read: "Isn't buywithme bankrupt and desparately [sic] looking for a buyer? a recruitng [sic] firm told me that their ponzi scheme collapsed and they don't even have money to pay a single employee."

We are still looking for additional information so please reach us by email or phone.

bpopper@observer.com

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