Classmates confirms layoffs |
Follow the ups and downs of a new Seattle startup in a series of behind-the-scenes posts by its founders.
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.
John Cook is co-founder and executive editor of TechFlash. He has been covering the technology beat for nearly a decade, writing about startups, entrepreneurs and venture capital, most recently serving as a reporter/blogger at the Seattle Post-Intelligencer.
READ FULL BIOGRAPHYSeattle Repertory Theatre presents Glengarry Glen Ross Feb 5th to Feb 28th
One of the largest and most renowned regional theatres in the country, Seattle Repertory Theatre produces a mix of celebrated classics, recent Broadway hits and cutting-edge new works in two theatre spaces. Now playing David Mamet's American classic Glengarry Glen Ross through February 28. Join us for Sales Rep Industry night February 11 with the Puget Sound Business Journal. For details click here.
Join the Microsoft WebsiteSpark program and get software, support and visibility – at no upfront cost. You’ll benefit from fast and easy access to current Microsoft development tools, platform technology and server products including Visual Studio, Expression Studio, Silverlight, Windows Web Server 2008 and SQL Server 2008 Web.
Seattle-based Adhost is a WebsiteSpark hosting partner providing dedicated servers with free Windows Web Server 2008 and SQL Server 2008 licensing for three years to Web developers enrolled in WebsiteSpark. Servers are located in our secure data center with SAS 70 Type II certification, 24x7 technical support and 24x7 client access.
WTIA 15th Annual Industry Achievement Awards
Held on March 4th at the Showbox SODO, this casual event celebrates and recognizes some of the best emerging and established companies in the Washington Tech Industry. The evening will feature a finalist company technology showcase and a variety of coffee, chocolate, and wine samples from local companies. More than 800 attendees are expected to be present at the celebration. Public online voting for Technology Leader of Tomorrow Scholarships will open February 3rd on the WTIA site.
We congratulate the 2010 finalists and look forward to unveiling the winners on March 4th. REGISTER NOW!