Oct 30, 2008 10:40 PM
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San Francisco, 10:02 PM
Tue Feb 9
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Brian Sugar, cofounder of San Francisco-based blog network Sugar Inc., sent two ominous Twitters this afternoon: "Sad day." "First rain, will last for 5 months." Was he just talking about the weather? Less than an hour later, he'd gathered his staff into a conference room and told them he was laying off nine employees, mostly in editorial — 11 percent of the company's 80-person staff. What's worse: More layoffs could come over the next two quarters, if ad sales don't improve.
Sugar's CEO may have aimed to put employees on notice, in hopes of motivating them to perform. But leaving a shoe to drop is the worst mistake one can make in cutting employees, the meltdown's self-appointed layoff pundits agree. Sugar Inc.'s real problem may be self-inflicted: It took ad sales in-house from partner and investor NBC this summer, leaving it with a sales force still in development, right as the online-advertising market got a lot tougher.
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