BuyWithMe axes half its workforce

After six acquisitions in six months, has BuyWithMe run out of cash?

BuyWithMe has been on a roll this year, snapping up companies left and right in a bid to get back into the running as the number three player in the daily deals market.  But after acquiring six companies in as many months, all that spending may have left BuyWithMe in a bit of a cash crunch.  The company confirmed Thursday morning that it has laid off 100 of its 200 employees.

“BuyWithMe did have a significant reduction in staffing this week,” BuyWithMe CEO Jim Crowley said in a statement.  “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.”

The news first leaked after an anonymous reader posted a comment on an article by DailyDealMedia indicating the company was laying off 75% of its workforce.  The commenter—one of the 100 employees given the axe—didn’t pull any punches: “Andrew Moss [founder and Chief Strategy Officer] has no vision and is incapable of innovating.”  Ouch.

BuyWithMe has raised $21.5 million across two rounds of funding led by Matrix Partners and Bain Capital Ventures.  The company was looking a bit unsteady last December when CEO Cheryl Rosner stepped down after only eight months on the job.  Previously, BuyWithMe had been one of the heavy hitters in the daily deal space, vying with the likes of Groupon and LivingSocial for the top spot.  But while Groupon and LivingSocial skyrocketed to the top, BuyWithMe flatlined.

In January, Jim Crowley, former CEO of online gaming company Turbine, took the helm of BuyWithMe and soon thereafter launched the company’s acquisition spree—LocalTwist in March, DealADayOnline and Groop Swoop in May, Edhance in July, Scoop St. in August, and TownHog in September.

But now, BuyWithMe may have just landed itself in a financial quagmire.  One laid off employee told BetaBeat that the company had been trying to raise a $100 million round for a $500 million valuation, but there were no bites.  Now, with no prospects in sight, the company is reportedly looking for a buyer.  The employee added that the axed workers were given no warning, nor were they offered anything in the way of a severance package. 

Image source: fapit.net