Ad-backed free email provider Juno Online Services is closing offices in San Francisco, Los Angeles, Chicago, and Detroit amid rumors of layoffs of up to 60 employees.
However, Juno President Charles Ardai was quoted as saying the closings are an effort to consolidate its sales force in New York, where most of the larger sponsorship deals are taking place. He said they are not due to fiscal problems.
Ardai told the Silicon Alley Reporter that the number laid-off was nowhere near 60, but said it’s against company policy to discuss specific numbers. He added: “This is not something to be happy about, but it the right thing to do for the business. It is not something we do lightly.”
“We found that the bigger, more profitable deals–huge deals–were almost all coming out of the New York sales force. With a product that is technically sophisticated, you need to have the advertising sales force nearby,” said Ardai.
According to Ardai, the rumors of 60 staffers being laid off comes from a number of factors, including: transfers to parent company D.E. Shaw & Co., LP; regional sales office shut-downs; and what he calls the “January effect,” a seasonal trend in which employees who receive poor reviews in December, exit upon receiving their bonus in January.
The Reporter quoted Ardai as saying the company currently has a staff of approximately 130 and recently signed a multimillion dollar, multi-year sponsorship deal with a major credit card company.
The deal, which will be announced next week, comes after the March 18 announcement of a five-year, multimillion dollar deal signed between Juno and long distance provider LCI International.
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