Yes, Google has laid off employees before. But those were DoubleClick employees. America's CTO, Eric Schmidt, managed to cull any deadwood from Google's Mountain View campus without it becoming a hot story. This time it's different, writes one of my leakers, and all the smart people can smell it. Here's the algorithm:
"All of us are vulnerable,'' Google CEO Eric Schmidt told a Bloomberg reporter yesterday . "It's a race between a contraction in advertising, which would affect everybody, and a very positive shift from offline to online." Carly Fiorina couldn't have said it better. This photo of Squirrel Boy with Barack Obama and PepsiCo Chairwoman and CEO Indra Nooyl is a bit stale — July 28 — but it makes the point: Schmidt has what Tom Wolfe called the right stuff to lead geeks. Try to picture Larry and Sergey in that room as the co-heads of U.S. technical preparedness for a terrorist attack. Vint Cerf, maybe, if he ever ships a project more tangible than Net Neutrality. (Photo by Chip Somodevilla/Getty Images)
We haven't yet heard who will be the entertainment at Yahoo's Christmas party, scheduled for December 6, four days before the company proceeds with mass layoffs. Yet again, it's being held at a convention center by a racetrack — this year, with a Vegas theme. 2007's party featured a Neil Diamond cover band. For this year, how about Money For Nothing, the Dire Straits tributaries? We're sure they're cheap. Good thing, because a tipster familiar with Yahoo's budget says the company will spend $8 million to $10 million this year on holiday parties alone.Not just the bash in San Mateo, but also festivities for Yahoo's offices in Los Angeles, New York, and around the world. Oh, and more for the divisions. "Each department below Jerry has a party, so you end up going to at least four parties, all for the same company," says our source. For Yahoo, this is just business as usual. "The company leadership is in denial and there are parties every week," our source continues. If a Hollywood producer were to order up a company born out of California's touchy-feely, you're-okay-I'm-okay self-esteem movement, Dreamtown's best screenwriters would be hard pressed to come up with a more risible example than Yahoo, a company devoted to celebrating itself, at the expense of doing anything worth celebrating. Yahoos may not be doing OC-80, but they're addicted to fun for fun's sake — conveniently paid by shareholders. Bread and circuses; but four days after the circus is over, many Yahoos will lose their bread. (Photo by isaacschlueter)
An online-video industry insider emails us to tell us that Veoh has laid off 40 percent of its staff. On Monday afternoon, LinkedIn had 94 people listed as Veoh employees. PaidContent says that the company laid off 15 employees from its Russian office in St. Petersburg, and is hiring stateside. Veoh has raised almost $70 million in venture capital in order to produce a pale imitation of YouTube.
Bid goodnight to Jimmy Wales's dream of cashing out on Wikipedia, the world's largest collection of infrequently asked questions. The vehicle for his scheme, a derivative for-profit startup called Wikia, is imploding. A tipster tells us that the 43-person company has laid off 30 percent of its staff. (Update: The company now says it has only laid off 10 percent of its employees.) Wikia lets users build their own anyone-can-edit wiki pages. Unlike Wikipedia, Wikia sometimes runs advertising on the wikis; its most popular sites have to do with videogames. So why the layoffs?A source who has seen Wikia's numbers says the company is experiencing "a hemorrhaging of cash circa 1999" — losses, in other words, like the first generation of dotcoms. No surprise there, since it has offices in San Francisco, New York, and Poland, and many of its products, like Wikia Search, are staggeringly unpopular. Wikia raised $14 million in venture capital from Bessemer Venture Partners and Amazon.com, the last of which came in December 2006; without a new infusion, it must surely be running low on cash.
"Yahoo will almost certainly fire too few employees when it announces its mass layoffs this week," predicts Henry Blodget, the disgraced stock analyst everyone now listens to. Henry's got a bunch of charts you can look at, or you can read his kicker: "What's the smart amount of spending decline to plan for? We think about 10 percent next year and slightly more in 2010. We would also plan on the decline lasting at least two years."
Yahoo's layoffs? They're now Wall Street Journal official, which means someone in upper management decided to talk to a reporter at the newspaper before Yahoo's own employees got the word. Not that there is yet any word on how many Yahoos, exactly, are losing their jobs; Yahoo managers have been ordered to cut their budgets by 15 percent, but decisions on specific jobs won't come for weeks. Once again, Yahoo's grinding bureaucracy and nice-at-all-costs culture is keeping it from making the swift decisions its business — and its workforce — needs.
"One of the reasons this is so difficult is simply because the business continues grow," mistypes Rich Barton, CEO of Seattle-based online real-estate startup Zillow. Following the current fad, the company axed 25 percent of roughly 150 employees. Barton's layoff blog post sticks to the formula: I'm sad, this is hard, but business is just fucking great! But I'm sad. The End. I prefer Barton's personal profile on Zillow: "I love houses (I've owned close to 10)." So he feels your pain.
Not even the biz reporters we reblog have much to say about Pandora laying off 20 of its 140 employees. Last month, founder Tim Westergren had sent out warning signals that online music royalties could be a problem. Cutting 14.2 percent of staff this week, though, seems more pro forma than panic. Westergren's "A Sad Day" bears no news, but serves as an intriguing template of that new writing genre, the layoff blog post. Spot the patterns:
There were "massive layoffs" today—amounting to 14% of staff—at Heavy, the guy-focused network of websites. Heavy has been on deathwatch recently, since it's become increasingly clear that the company's strategy of inflating its traffic figures by buying pop-up ads will not be enough to satisfy its big investors. This is a bad sign for those sites with flashy branding but little substance to build a strong base of regular visitors. The venture capitalists who sunk millions into Heavy two years ago thought that it's "Heavy Men's Network" could turn into something big among the coveted young male demographic. But apparently the company's ad network isn't making any money. The financial crisis is going to hurt the ad market even for strong sites. For shakier ones, it could be a death blow that even the grownup businessmen Heavy brought in to professionalize the company can't avoid. Heavy's optimistic statement today:
"Visual search engine" company SearchMe had, according to CrunchBase, 52 employees and $43.6 million in funding, led by Sequoia Capital. Just two weeks ago, TechCrunch ranked the company No. 76 in "Startups Best Positioned To Weather A Downturn." But VentureBeat confirms the company has fired 20 percent of its staff. Using the ad-hoc Sequoia formula, "you need a year of cash and a revenue model," here's my guess: Too much spending. And it doesn't help that the first demo I clicked on the site's front door broke Firefox.
When will Yahoos get real? The global economy is seizing up. Management is planning layoffs in the thousands. The stock sank below $12 this week, with only the prospect of a takeover lifting it. BusinessWeek, we're told, is preparing a devastating story on CEO Jerry Yang, calling for the board to fire him. Yet the mood at the Sunnyvale headquarters is perversely sunny. Thursday, Yahoo spent some of its shareholders' money to hire the Elvis impersonator pictured here. This is the sickness of Yahoo's purple-with-pride culture: It has emphasized self-celebration at the expense of having something to celebrate. "Funness" is prized above all — above excellence, focus, and achievement.
Is Yahoo cutting 3,000-plus jobs? A source inside the company says plans have been set to slash 3,500 jobs on December 10. And, briefly, Fortune's Techland blog agreed, reporting that Bain & Co. had recommended Yahoo cut 3,000 of its 15,000 employees. The Fortune post has been unpublished, though it still appears in Google News. I've called the writers to ask what happened to the story. Here's the excerpt which ran on Google News:
Cue the schadenfreude brigade: AdBrite, the online-advertising network funded by Sequoia Capital, has laid off 40 of 100 employees. Why will some view this with glee? Because, a decade ago, AdBrite founder Philip Kaplan ran a site called FuckedCompany, which chronicled layoffs and cutbacks in the bursting of the bubble. AdBrite actually grew out of Kaplan's ad-sales efforts on the site. Two vice presidents are leaving, including Paul Levine, the former Yahoo executive AdBrite hired to run marketing last year. Anyone want to bet Levine will land at Zvents, a startup whose board of directors he recently joined?
A tipster tells us that the Village Voice laid off the man who oversaw its print ad production department this week, due to budget cuts. One rumor going around the office, we hear: the possibility that the production of the Voice could be outsourced to Florida. That would be rather sad. Another rumor: the possibility that more layoffs at the Voice could be coming tomorrow. That would also be sad. They're getting down to the bone marrow over there. Anyone with more info, email us. [UPDATE: An official source at the Voice tells us that the man laid off was "a part-time production employee who had until recently been a freelancer," and that he didn't oversee the print ad production department. Of the outsourcing to Florida rumor, the source says it's "Pure fantasy."]
Playboy is cutting 80 jobs , including 55 layoffs, in an effort to save $12 million. The company is also exiting the DVD business completely, moving far-flung employees into the LA office, using cheaper paper, and cutting entertainment expenses (noooo!). This has all been easy to foresee. We hear Playboy's main money source at the moment is international brand licensing, along with distribution of their archives online. Not even nekkid women can convince people to buy magazines these days.
A tipster tells us that Yahoo plans to cut 3,500 jobs, chiefly in sales and finance, on December 10 — while keeping plans for a multimillion-dollar holiday party days before the cuts:
