INNOVATION ECONOMY
Social downsizing
One firm's recent layoffs unfold on Twitter, with some people even getting job offers
By Scott Kirsner, Globe Columnist | March 29, 2009
For several weeks earlier this month, employees at Burlington, Massachusetts-based Mzinga Inc. sensed there was some bad news brewing. The company, which sells social media software and services to help businesses with marketing, customer communications, and employee education, hadn't been able to raise a new round of funding. Doors to executives' offices that always remained open were suddenly shut, and a board meeting was set for March 10.
"Everything came to a standstill," says one former employee, who requested anonymity so as not to violate the terms of his severance package. "Everyone knew it was going to be something significant, but we were just saying, 'What's going on?' "
The situation was pretty typical of the tense times that precede any layoff: On March 19, about 40 employees - roughly 18 percent of the workforce - were terminated as part of the company's second round of cuts in 2009. But what was unusual about Mzinga's situation was how widely it echoed throughout the universe of bloggers and Twitter users, since so many of the company's employees and customers - and the analysts who track its ups and downs - are part of the online community that shares morsels of information and "status updates" on a moment-by-moment basis. This was a layoff for our Twittery new times.
The first public hint that something might be up at Mzinga appeared on Twitter. On March 16, a Forrester Research analyst named Jeremiah Owyang wrote to his Twitter audience that he'd been hearing that "Mzinga is having financial difficulties. They need to brief me immediately." Later that day, Mzinga's public relations manager replied, again publicly on Twitter, that she'd set up a time for Owyang to speak with executives.
Later that day, Owyang posted a short note on his blog, headlined "Expect changes at Mzinga." Without explaining what was happening at the company - he hadn't yet spoken to anyone there - he suggested that Mzinga clients and prospects "stall any additional movement till they brief me," which he expected to happen one week later. The subtext of his post was that signing any new deals with Mzinga would be unwise.
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