uBid laid off about 12 of its 91 employees on Monday, the same day eBay laid off 1,000 employees and several hundred temps. Infopia chipped in with 12 of its employees, making it a Pink-Slip trifecta. (ChannelAdvisor was four weeks early with a 20 percent workforce reduction last month.)
uBid, which recently changed its name to Enable Holdings, had to distance itself from The Petters Group last week after it was revealed Petters was being investigated by the Feds. (Yesterday's Washington Post article chronicled the scandal, reporting that Petters is in jail "accused of spearheading an elaborate Ponzi scheme since the mid-1990s, in which he allegedly dummied up fake sales transactions between his company and Big-Box stores like Sam's Club, Costco and BJ's Wholesale Club to entice investors.")
Enable Holdings spokesperson Ryan Calverley reiterated today that the Petters Group does not own Enable Holdings - it's a shareholder - and that it had no involvement with the day-to-day running of uBid. The Petters Group does own companies, including Polaroid, and the Star Tribune reported that about 50 employees of Petters Group Worldwide companies were expected to get layoff notices on Friday.
Calverley told me today that layoffs at Enable Holdings had nothing to do with the troubles facing Petters. Monday's layoffs had more to do with what's happening on Wall Street, he said, and the fact "we got too big, too quick."
Just one day after Pink-Slip Monday, venture capital firm Sequoia Capital sounded the alarm in its now famous "R.I.P.: Good Times" presentation, warning its portfolio companies to slash their burn rate (cut expenses) and become profitable quickly. The new thinking is that VC-funded firms need to change course to focus on revenue rather than growth, and that companies need to be cash-flow positive.
In a seemingly perverse logic (and unfortunately for employees), layoffs may be seen as a positive these days - a sign that companies are focused on profitability and not burying their head in the sand.
While retailers may be concerned by all the doom and gloom, small online sellers may be better positioned than their big-box retail brethren. With low overhead and a focus on the bottom line, they already operate lean and mean. Many operate as "liquidators" and know how to haggle. Sellers who can move on a dime and adjust strategies quickly may actually thrive in a downturn.
Everyone is cash-hungry, and a large seller I spoke to today said suppliers are willing to significantly mark down goods to convert inventory to cash.
The trick for online sellers, as always, is to get eyeballs to their listings. eBay's not the marketplace it was during the dot-com implosion. (Remember the listings for high-end office furniture from failed Internet companies that launched the careers of many an eBayer?) Sellers these days need to know how to get shoppers and make smart inventory and pricing moves.
People still need goods - clothes, electronics, supplies and toys for the kids. But shoppers - like venture capitalists and ecommerce firms - are being smarter with their dollars.