Classmates confirms layoffs |
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I still haven't received direct comment on the layoffs at United Online's Classmates.com unit, but I did finally get a chance to listen to the company's earnings call which occurred Wednesday afternoon. During the call, United Online Chief Financial Officer Scott Ray finally confirmed that the layoffs occurred on Tuesday.
As part of the reduction in force, the Classmates.com unit chopped 71 employees or the equivalent of 17 percent of the work force. United Online also eliminated 25 jobs in its communications unit, with the total reduction accounting for about five percent of the company's overall workforce. In his prepared remarks, Ray said the layoffs would "increase efficiencies" and "streamline operations" with the company achieving $10.5 million in annualcost savings.
The layoff news was peculiar on several fronts.
For one, in the conference call, United Online CEO Mark Goldston painted an optimistic picture of the Classmates business using words and phrases such as "healthy," "impressive growth," "low churn" and "increasing margins." He added that the "saliency" of Classmates -- with over 60 million registered users -- was increasing even in an era of free social networking sites.
Later, he touted new offerings such as a redesigned Web site, an iPhone app and a new method by which Classmates could charge customers a single fee for 24 hour access to portions of the site.
It was only much later in the call that the chief financial officer noted the 17 percent reduction in the workforce.
Furthermore, I am really perplexed on why the United Online spokesman simply couldn't confirm the news when I inquired early yesterday morning or later in the afternoon -- especially after the layoff disclosure was made in the conference call. Despite repeated emails to the company for a statement or confirmation about the layoffs, I was told by the spokesman that he couldn't comment.
And this -- oddly enough -- last occurred at 6:30 p.m. on Wednesday. That was roughly four hours after Ray made his statements about the cuts in the conference call.
I was told I could listen to the conference call to get a statement, which I ended up doing this evening in order to find out what was going on. But the United Online folks certainly didn't make the information accessible.
I usually don't write about the back story of how I do my job or the public relations hoops I sometimes have to jump through. But, in this case, I was left with a feeling that someone was really trying to bury the story.
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