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.
Betabeat has reached out to BuyWithMe and its investors, Matrix Partners and Bain Capital Ventures, late last night for comment, and will update the story when we hear back.
When Betabeat asked whether current CEO James Crowley, who was hired this January, was involved with the list, the source said it was Mr. Moss. “He just came back yesterday and took back over control of the company and made the fires today. The founder himself sat down and made a list of people who were his favorites, that he liked and all people that he did not like, mostly a lot of new people.”
According to the source, one of those new people included chief people officer Charlie Gray, an Xoogler who has brought on in August. The source said Mr. Gray resigned yesterday after refusing to be a part of the layoffs done in that manner. Betabeat also reached out to Mr. Gray for comment.
“Now the floodgates are open and everybody’s leaving there. Even the people that stayed, that didn’t get cut, they’re getting out,” said the source.
BuyWithMe has acquired six companies in the past six months. “I just don’t think they spent money correctly or intelligently. They even acquired that company for a bunch of money and it was an acqui-hire for three or four engineers. I think they only had two engineers stick in the whole deal,” said the source. BuyWithMe’s recent acquisitions including TownHog, ScoopSt, and Edhance. “It’s a prime example of a me-too company that raised a lot of money and they spent it all and they grew too fast and they didn’t have the leadership.”
UPDATE: Betabeat spoke with a former BuyWithMe employee familiar with the layoff situation who wanted to remain anonymous. This source is a different individual than the ones quoted in previous posts. “To say that Andrew made a list of people that he liked and didn’t like, I don’t think it’s that simple, although I understand that interpretation of it,” said the former employee. “Oh sure there was a list, but everyone has different points of view.”
The more troubling element, said this source, was the fact that Mr. Moss was allowed to be involved in this process and the lack of intervention from both the BuyWithMe’s board and investors. “Andrew is a board member who has kind of retaken control of the company and he is widely and deeply disliked by the employee congregation of the company, so it was shocking to give him this kind of authority. He and the board then ignored their obligations to their people and throw them out with nothing.”
The source seemed taken aback at how BuyWithMe managed its finances and the lack of responsibility to its employees on behalf of the company and its investors. “They got a round of funding some time ago, but they spent it on these acquisitions, so they are running out of money fast,” the source noted. “The fact is when you’re an investor–and the company still does have two major investors [Bain Capital Ventures and Matrix Partners]–if you drive into the wall like that while you’re looking for more funding, then I think it’s your obligation to step up and pay out those obligations to your employees at that point. They should have taken steps earlier or they should now face the facts that they screwed up. There’s well over 100 people who were out on the street yesterday with literally nothing. It’s just crazy.”
UPDATE #2: A source reached out to say that indeed Mr. Moss made a list. It became public earlier this week and was the subject of wild rumor within the company. But this source says that it did not determine the final cuts. “People who were clearly Andrew’s favorites got fired, so I don’t buy this as a like and don’t like list.”
This source says Mr. Moss was creating a list to assign value to each employee. He was hoping to keep just a few employees on full time and the rest on a contract basis. But yesterday CEO James Crowley, who lives in the Boston suburbs and is not closely involved with the day to day operations, arrived in New York and announced the massive layoffs, without severance.
“The CEO, he was basically up there in Boston with Bain doing a cash flow analysis. They looked at which employees generated the most revenue, then came down and fired the rest. It sucks, it makes no sense.”