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<ul><li><keyword id="19897758" type="General" weightage="100" keywordseo="samsung" source="keywords">Samsung</keyword> will lay off over 200 people in India</li><li>Employees across various departments will be affected</li><li>Affected employees will receive three months of salary</li></ul> The tech industry has seen a wave of layoffs in the recent months and another company has now joined the fray. <keyword id="19945681" type="General" weightage="20" keywordseo="samsung-electronics" source="keywords">Samsung Electronics</keyword>, known across the world for its smartphones, appliances, and much more, has now decided to cut more than 200 jobs in India. The layoffs come at a time when the company is grappling with lesser sales due to lower consumer demand, a report in ET reveals. <h2>Samsung plans to lay off people in India </h2> Industry insiders told ET that the layoffs will affect various departments including mobile phones, home appliances, and consumer electronics. The cuts are part of Samsung’s broader effort to lower costs and maintain profitability during this challenging period. The layoffs represent around 9-10 percent of Samsung’s managerial staff in India, where the company employs about 2,000 executives. Those affected will receive three months’ salary along with a severance package offering one month’s salary for every year of service. <h2>Samsung's restructuring plans </h2> As part of its cost-cutting measures, Samsung is also considering merging some of its business divisions, such as television and home appliances. This restructuring, which aims to streamline operations and reduce inefficiencies, could lead to further layoffs. While no official decision has been made yet, reports suggest that the final plan will be confirmed after Diwali, a key festival season in India. The report also mentioned that Samsung has already frozen new hires, and positions left vacant by executives who have resigned are not being filled. Additionally, the company is expected to reduce the number of off-roll employees to further cut costs. <div type="Article" hostid="261" msid="112853351" title="Samsung launches AI-powered washing machines, all you need to know" mstype="2" mssubtype="0"><payload><![CDATA[See also]]></payload></div> <div type="Article" hostid="261" msid="112165411" title="India&amp;#39;s smartphone shipments dip 2% in Q2 2024 as heatwave, slower demand takes toll" mstype="2" mssubtype="0"><payload><![CDATA[See also]]></payload></div>

Samsung Electronics plans to lay off over 200 Indian employees to reduce costs, details inside

New Delhi, Even as tech giant <keyword id="6355629" type="General" weightage="100" keywordseo="google" source="Orion">Google</keyword> continues to cut down staff, a sacked Indian employee stated that the layoffs are not based on performance. In a LinkedIn post, Google India employee Animesh Swain stated that pink slips were also served to employees with highest ratings. The list also has names who were recently awarded promotions. "The people who managed to stay (including me) are not necessarily better than those laid off," Swain was quoted as saying in the post. Another employee Gurugram-based Aakriti Walia, working as a Google Cloud programme manager, was laid off just 10 minutes before a meeting. "The 'access denied' message on my system left me numb as I was preparing for my meeting just 10 mins away," Walia posted on the professional networking platform. "As I celebrated my 5-year Googleversary just a few days ago, little did I know it would be my last," she said. Earlier, Jennifer Vaden Barth, a creative Strategist at Google, said that the "layoff impacted very talented and highly rated professionals". Barth, who had worked at Google for 15 years said that "layoffs hit women particularly hard, especially women over 40". Meanwhile, in a bid to further cut costs, Google has even asked employees who return to work to share their work desks with a "partner" to maximise office space. Google India has recently terminated more than 400 employees. The layoffs at Google India were part of the larger job cuts that impacted 12,000 workers globally at the company. Denying that the layoffs were done "randomly", Alphabet and Google CEO Sundar Pichai had said earlier that he is "deeply sorry" for reducing the workforce. In an email to employees, Pichai said he takes "full responsibility for the decisions that led us here". The layoffs at Google's parent company were expected amid the deepening funding winter that has hit companies of all sizes in the global slowdown and recession fears. SEE ALSO: <a href="https://www.businessinsider.in/tech/mobile/news/oppos-new-flexion-hinge-has-made-flip-phones-more-practical-and-crease-minimal/articleshow/98213979.cms">Oppo’s new Flexion hinge has made flip phones more practical and crease minimal</a> <a href="https://www.businessinsider.in/tech/gadgets/news/noise-and-fire-boltt-entered-in-top-five-in-global-smartwatch-shipments/articleshow/98171390.cms">These two Indian brands have together sold more smartwatches than Samsung in 2022</a> <a href="https://www.businessinsider.in/business/news/mukesh-ambanis-jiocinema-to-take-on-disney-hotstar-and-amazon-prime-with-free-4k-ipl-streaming/articleshow/98150380.cms">Mukesh Ambani’s JioCinema to take on Disney+ Hotstar, and Amazon Prime with free 4K IPL streaming</a>

Google layoffs not based on performance: Sacked Indian employee

<ul><li>Samsung is letting go of around 1,000 employees in India as a part of its ‘cost rationalisation programme’.</li><li>Industry insiders told the Economic Times that is due to Samsung’s dip in profits as more and more Chinese companies enter the Indian market. </li><li>Last month, Samsung laid off workers at its last manufacturing plant in China and currently, the majority of its global smartphone happens in Vietnam.</li></ul>Samsung is in the midst of a ‘cost rationalisation programme’ that entails letting go of around 1,000 employees that currently work for the company in India. The process is already underway according to industry insiders who spoke to the <a href="https://economictimes.indiatimes.com/industry/cons-products/electronics/boxed-in-by-chinese-rivals-samsung-to-sack-1000-in-india/articleshow/70033680.cms?from=mdr">Economic Times. </a>The South Korean tech giant submitted a list of employees from their 20,000-strong workforce in the country who have been underperforming and not been delivering on team targets to the headquarters in Seoul. The overall list makes up for around 10% of the company’s total team strength spreading across departments like sales, R&amp;D, human resources and finance. As many as 150 of its employees from the telecom networks division have already been let go of. Samsung plans to finish the exercise by the end of October this year, according to the report. Executives have shared that this move is focused on generating more profit from Samsung’s India operations, a pivot from their prior impetus on revenue. Samsung, on the other hand, has denied the report stating, "In the past one year, we have generated 2,000 new jobs at Samsung. <keyword id="107877" type="CITY" weightage="20" keywordseo="Samsung-India">Samsung India</keyword>’s business continues to grow and expand, hence we will hire more talent across businesses through the year. As we contribute to job creation, we continuously realign resources as per business priorities to make our business more robust and efficient for long term success." Under pressure Samsung is still the second largest player in the Indian smartphone market according to <a href="https://www.counterpointresearch.com/india-smartphone-share/">Counterpoint</a>. However, it has been unable to re-claim its throne back from Xiaomi, the Chinese smartphone manufacturer which massively undercut phone prices on its entry. Even when it comes to premium smartphones, OnePlus has been giving Samsung a run for its money by launching high-end smartphones for under ₹50,000. But, Samsung is not only a smartphone manufacturer but is also a consumer electronics company — so, it has its hands in a lot more pies. Xiaomi took another bite out of that pie when they launched Mi Smart TVs in India. The Chinese company claims, quoting data from the <a href="https://twitter.com/manukumarjain/status/1138302206787108864">International Data Corporation</a>, that it has been largest TV brand in India for the last four consecutive quarters. The resulting price cuts on smartphones and television led to lower margins and thus lowering Samsung’s profits according to executives. Not just in India The pressure has been building on Samsung in China as well where slowing sales and increasing competition <a href="https://9to5google.com/2019/06/05/samsung-cuts-production-and-jobs-in-china/">led to layoffs </a>at its last functioning plant in Huizhou — after its Tianjin and Shenzhen plants were shut down — in the country last month. And it’s not just its own sales that the company has to worry about. <a href="https://www.businessinsider.in/apples-iphone-problems-are-becoming-samsungs-problems-and-it-wants-to-sue/articleshow/69975021.cms">Apple’s falling sales</a> have already adversely affected the South Korean giant who manufacturers iPhone displays ‘exclusively’ for the American smartphone maker. It now has to deal with an excess supply that it can’t unload. As of now, Samsung’s impetus lies in manufacturing in Vietnam where half of Samsung’s <a href="https://www.gsmarena.com/samsung_cutting_its_phone_manufacturing_in_china-news-37415.php">smartphones are manufactured</a>.

Samsung is firing 1,000 employees in India as cheaper Chinese smartphones squeeze profits

<keyword id="24349" type="LOCATION" weightage="20" keywordseo="Hong-Kong">Hong Kong</keyword> flag carrier <keyword id="94768" type="COMPANY" weightage="20" keywordseo="Cathay-Pacific">Cathay Pacific</keyword> on Wednesday announced that it will eliminate 8,500 job posts, making 5,900 staff redundant, and shut one of its regional airlines with immediate effect in an effort to cope with the Covid-19 pandemic-induced fallout. This is the company's largest jobs cut in its history, the South China Morning Post newspaper reported. In the announcement, the carrier said 5,300 city-based and 600 overseas employees would be made redundant "in the coming weeks", while 2,600 unfilled posts would be abolished. Meanwhile, the company's regional arm, Cathay Dragon, would "cease its operations with effect from today" and seek regulatory approval for most of its routes to be absorbed and operated by Cathay Pacific and budget sister unit HK Express. Of the Cathay Pacific group's 35,000 headcount, 24 per cent of roles would be eliminated, the company said, which would reduce its workforce to a level last seen in 2007. Since the pandemic hit the city earlier this year, the airline witnessed a 99 per cent collapse in its daily passenger volume. Presently, most of its planes are grounded, the South China Morning Post said in its report. In an internal memo, Cathay CEO Augustus Tang told its 35,000 staff: "We have taken every possible action to avoid job losses up to this point... Unfortunately, we will not survive without further measures. "This is a heart-wrenching decision to have to make, for which I am truly sorry." The International Air Transport Association (IATA), which represents the global airline industry, had revealed in a forecast earlier this year that a recovery in air traffic to pre-pandemic levels would take at least four years. SEE ALSO: <a href="https://www.businessinsider.in/stock-market/news/top-stocks-to-watch-ril-ioc-ongc-cipla-hindustan-zinc-prabhat-dairy-and-others/articleshow/78780036.cms" data-type="tilCustomLink">Top stocks to watch — RIL, IOC, ONGC, Cipla, Hindustan Zinc, Prabhat Dairy, and others</a> <a href="https://www.businessinsider.in/tech/mobile/news/checkout-samsung-galaxy-m51-mobile-review/articleshow/78780771.cms" data-type="tilCustomLink">Samsung Galaxy M51 review – insane battery life</a> <a href="https://www.businessinsider.in/defense/news/india-will-be-most-consequential-partner-for-us-in-indo-pacific-this-century/articleshow/78780949.cms" data-type="tilCustomLink">US Defence Secretary believes India will be the most consequential partner for US in Indo-Pacific this century</a>

Cathay Pacific to cut 8,500 jobs and shut one of its regional airlines

<ul><li>German multinational <keyword id="6357341" type="ORGANIZATION" weightage="20" keywordseo="deutsche-bank">Deutsche Bank</keyword> is considering laying off 18,000 employees globally over the next three years. </li><li>This will reduce the bank's workforce to 74,000. </li><li>The investment bank is planning to shut down its equity business to overcome the $3.1 billion loss.</li></ul>In a bid to turn its banking division more profitable, German multinational Deutsche Bank is considering laying off 18,000 employees in the next three years. This will slash its workforce to 74,000, Mint <a href="https://www.livemint.com/news/world/deutsche-bank-to-slash-18-000-jobs-in-sweeping-restructuring-1562526055816.html">reported</a> citing company officials. Investors cheered the decision as Deutsche Bank shares rose 2.5% on Friday after the announcement. “Today we have announced the most fundamental transformation of Deutsche Bank in decades. We are tackling what is necessary to unleash our true potential,” Christian Sewing, Chief Executive Officer <a href="https://economictimes.indiatimes.com/news/international/business/deutsche-bank-slashes-18000-jobs-in-8-3-billion-overhaul/articleshow/70121953.cms">told </a>ET. These latest job cuts will account for one-fifth of the company’s workforce. While it yet unknown where these jobs will be retrenched, the bank is planning to shut its equity business to overcome the $3.1 billion loss in the second quarter. This came after failure in the bank’s merger with Commerzbank. The investment bank’s London unit staffs nearly 8,000 employees, making it a feasible stock operation unit. The bank will also spend nearly 4 billion euros by 2022 to revamp the business, and improve its finances. It will now focus on steady and revenue-generating business areas. Last year, it has already slashed 6,000 jobs. The German bank has been facing troubles for the last three years, as heavy penalties took a bite off its profits. The mounting fines it had to pay up has eroded its value too as share prices took a beating. In 2017, the bank paid $7.2 billion to the Justice Department for stock trading with the people having unsteady credit. The last few years have brought any good news for banking professionals across the world. As many as 32,000 jobs were cut last year in the financial services and banking sector, <a href="https://www.moneycontrol.com/news/world/deutsche-bank-says-to-slash-18000-jobs-by-2022-4179821.html">according to</a> Barkow Consulting. See also: <a href="https://www.businessinsider.in/mukesh-ambani-led-reliance-jio-cuts-contractual-staff/articleshow/69576896.cms">India’s telecom giant Reliance Jio cuts contractual staff</a> <a href="https://www.businessinsider.in/samsung-xiaomi-huawei-battle-results-in-1000-workers-fired/articleshow/70037544.cms">Samsung is firing 1,000 employees in India as cheaper Chinese smartphones squeeze profits</a>

Deutsche Bank will cut 18,000 jobs as it shuts down most of Asia's loss-making equities business

<ul><li>Novosol is a Singapore-based <keyword id="564900" type="ORGANIZATION" weightage="20" keywordseo="Mobile-advertising">mobile advertising</keyword> platform company that uses a platform called moLotus to deliver media rich messages to consumers without being dependent on data or another application. </li><li>Brands like HDFC, Standard Chartered, Samsung and HSBC are already using the moLotus platform. </li><li>With their new round of funding, the company is planning to expand their operations in India as well as penetrate new Asian markets like Indonesia.</li></ul> Novosol, an Singapore-based mobile advertising platform company just landed $7 million to drive market growth, and expand internationally. And their plans include disrupting the $2 billion direct marketing using their, moLotus — powered by by a proprietary technology it calls mGram. 
 <div type="ExtQuote" text="The new platform and the technology that we’re hoping to penetrate the Indian market and disrupt the Indian $2 billion direct marketing spend in the same way digital advertising is disrupting media." auname="Minhaz Lokhandwala, founder and CEO of Novosol"></div>



 Lokhandwala explains that the moLotus platform is a mobile advertising platform that can integrate video, images, text and links into one message and deliver it to consumers SMS inbox without having to use data or an application. 
 <div type="ExtQuote" text="We are also planning to partner Indian operators and the funding will be used for market development and expansion." auname="Minhaz Lokhandwala, founder and CEO of Novosol"></div>



 So, essentially, in expanding their partnerships with Indian telecom operators, brands — like Samsung, HDFC, Panasonic, Standard Chartered, HSBC, LÓreal and Tata who are already using moLotus — will be able to acquire new consumers and increase consumer engagement with existing ones. The company claims that moLotus has the potential to disrupt the direct marketing market in the same way digital advertising is disrupting media. 
 <div type="ExtQuote" text="moLotus platform has potential to disrupt the $300 billion direct marketing market and also eying the emerging $1.3 trillion digitalization and 5G opportunity - a large global and high margin revenue opportunity." auname="Minhaz Lokhandwala, founder and CEO of Novosol"></div>



 Novosol started its India operations in 2011, and the company has already collaborated with top telecom operators in several countries to generate a large and new high-margin revenue stream with minimal capital expenditure and operating expenditure for them. 
 <div type="ExtQuote" text="While the company is based in Singapore, they also have fully operational offices in Malaysia and India as well. The funding acquired will be used to expand operations in all three markets, while allowing Novosol to penetrate new markets in Asia — like Indonesia, Philippines, etc." auname="Minhaz Lokhandwala, founder and CEO of Novosol"></div>



 See also: <a href="https://www.businessinsider.in/mobile-ad-fraud-continues-to-surge-as-scammers-get-smarter-with-in-app-fraud-increasing-by-as-much-as-800-this-year/articleshow/67043219.cms" style="">Mobile ad fraud continues to surge as scammers get smarter - with in-app fraud increasing by as much as 800% this year</a> <a href="https://www.businessinsider.in/we-talked-to-publishers-about-their-fears-and-hopes-following-a-brutal-month-of-layoffs-in-digital-media/articleshow/67777521.cms" style="">We talked to publishers about their fears and hopes following a brutal month of layoffs in digital media</a> <a href="https://www.businessinsider.in/facebook-has-new-norms-for-political-advertisers/articleshow/67145040.cms" style="">Facebook ‘hits the street’ to verify political ads in India — but that might not be enough</a>

This Singaporean company hopes to disrupt mobile advertising in India by bypassing the need for Internet connectivity

Online rental platform <keyword id="20045635" type="General" weightage="100" keywordseo="frontdesk" source="keywords">Frontdesk</keyword> has become the first tech startup to lay off employees in 2024 -- its entire 200-person workforce -- during a "two-minute Google Meet call". The layoffs included full-time, part-time workers and contractors and the proptech startup is now on the verge of shutting down, <keyword id="19895623" type="General" weightage="50" keywordseo="techcrunch" source="keywords">TechCrunch</keyword> reported on Wednesday. Frontdesk CEO Jesse DePinto apparently told employees that the company would be "filing for a state receivership, an alternative to bankruptcy". The startup was yet to comment on the report. Founded in 2017, the startup managed more than 1,000 furnished apartments across the US. Frontdesk had raised about $26 million from investors such as <keyword id="20045638" type="General" weightage="50" keywordseo="jetblue-ventures" source="keywords">JetBlue Ventures</keyword>, <keyword id="20045636" type="General" weightage="50" keywordseo="veritas-investments" source="keywords">Veritas Investments</keyword> and <keyword id="20045637" type="General" weightage="50" keywordseo="sand-hill-angels" source="keywords">Sand Hill Angels</keyword>. The startup aimed to raise fresh capital but failed in its attempt. "Frontdesk was apparently still optimistic about its ability to raise more capital; the startup had posted on LinkedIn openings for several jobs, including a chief of staff role, just two months ago," said the report. Tech companies, including startups, around the world fired more than 425,000 employees in the last two years, with more than 36,000 employees being sacked in India in the same time period. In 2023, nearly 2.6 lakh employees were laid off in the global technology and startup sector. Citing the global macroeconomic conditions, Big Tech firms and startups across the spectrum have sacked employees, and layoffs continue to happen. SEE ALSO: <a href="https://www.businessinsider.in/tech/mobile/webstories/new-upcoming-smartphones-in-india-in-2024-apple-samsung-google-mobiles-in-the-list/slidelist/106489936.cms">Apple to Samsung and many more – smartphones set for launch in 2024</a> <a href="https://www.businessinsider.in/tech/mobile/news/samsung-galaxy-s24-series-with-improved-telephoto-lens-exynos-2400-chipset-expected-mid-january/articleshow/106484424.cms">Samsung Galaxy S24 series with improved telephoto lens, Exynos 2400 chipset expected mid-January</a> <a href="https://www.businessinsider.in/business/auto/news/new-creta-to-punch-ev-cars-hitting-indian-market-in-january-2024/slidelist/106479554.cms">New Creta to Punch EV – Cars hitting Indian market in January 2024</a>

Gone in 2 minutes: Frontdesk lays off entire staff over a short GMeet call

On Friday morning, many <keyword id="6354616" type="General" weightage="20" keywordseo="Twitter" source="Orion">Twitter</keyword> users reported problems with the <keyword id="391186" type="General" weightage="20" keywordseo="microblogging-site" source="Orion">microblogging site</keyword>. Many stated that they're unable to log into the website. A popup that reads "Something went wrong, but don't worry - try again" appears when the feed page first loads. "I'm unable to access Twitter and getting an error prompt...Something went wrong, but don't fret -- let's give it another shot.Try again," a social media user wrote. Reportedly, the outage started around 3 am and saw a relatively big spike around 7 am. Meanwhile, Twitter has been in news for other reasons as well, thanks to Elon Musk. Last week, he took control of Twitter and fired its top executives. He has also started mass layoffs today. As per an unsigned internal memo seen by The Verge, Twitter employees were notified in the email that the layoffs were set to begin. Employees will receive an email by 9AM PST on November 4 confirming whether they have been laid off or not, according to the internal memo, which also states that employee badge access to Twitter's offices will be shut off "temporarily." "We acknowledge this is an incredibly challenging experience to go through, whether or not you are impacted," the memo read. "Thank you for continuing to adhere to Twitter policies that prohibit you from discussing confidential company information on social media, with the press or elsewhere," the memo added. Musk is expected to cut roughly half of Twitter's roughly 7,500-person workforce. Musk has already indicated that he would make job cuts at Twitter, telling employees at a town-hall meeting this summer that there needs to be "a rationalization of headcount" at the social network. In April, Twitter accepted Musk's proposal to buy and make the social media service private. However, Musk soon began sowing doubt about his intentions to follow through with the agreement, alleging that the company failed to adequately disclose the number of spam and fake accounts on the service. In July, in a surprising turn of events, Musk who had long been showing his interest to buy Twitter terminated the deal. The Tesla CEO did so by alleging that Twitter violated their mutual purchase agreement by misrepresenting the number of spam and fake bot accounts on its platform. After Musk put out the deal termination announcement, the market saw a sharp decline. Later, Twitter sued Musk accusing him of using bots as a pretext to exit a deal. Again, last week, Musk confirmed that he would move forward with the Twitter buyout at the originally agreed price of USD 54.20 per share. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/international/news/us-risks-losing-skilled-professional-h-1b-visa-holders-to-canada/articleshow/95290851.cms">US risks losing skilled professional H-1B visa holders to Canada</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/tech/news/samsung-launches-iot-enabled-air-purifiers-starting-at-12990-in-india/articleshow/95280908.cms">Samsung launches IoT-enabled air purifiers starting at ₹12,990 in India</a>

Twitter down? Several users complain about login issues

<div class="KonaFilter image-container display-table float_right"><div><div class="image">BI Intelligence</div></div></div>HTC and Lenovo announced a round of large-scale layoffs in an attempt to remain profitable amid consolidation in the smartphone market. Tech giants Samsung and Apple have made it particularly difficult for smaller players to generate enough revenue and profit to stay viable, forcing many to streamline their operations.While specifics surrounding where the job cuts will come from have not been announced, HTC has stated that it will be dropping 15% of its workforce, or more than 2,000 jobs. Lenovo will cut 3,200 non manufacturing roles, most likely from its mobile business group. The company's restructuring efforts are in part a reaction to Lenovo's poor performance in the first quarter of this year, according to a <a href="http://forums.appleinsider.com/t/187703/htc-lenovo-announce-job-cuts-as-losses-mount-in-smartphone-market-battle">report</a> by AppleInsider.What both companies are undergoing is emblematic of a larger ongoing shift in the mobile sector:<ul><li>Over the past few years, Samsung, Apple, Huawei, and Xiaomi have quickly emerged as the dominant smartphone manufacturers, cornering the high- and low-end markets for smartphones in almost every country.</li><li>Samsung and Apple, which lead the pack in shipments, are aimed at the premium price point market. They dominate in wealthier countries such as the US and the UK. The two tech giants still hold a combined 43% of the global smartphone market.</li><li>Huawei and Xiaomi lead the mid- to low-end price point for smartphone devices, concentrating primarily on emerging markets like China, India, and Brazil. Combined, these two low-end smartphone vendors account for almost one-third of China's massive smartphone market in Q2. </li></ul>Finding this article interesting? Thousands of professionals just like you had it in their inbox first. Stay ahead of the curve and gain a comprehensive understanding of the latest news &amp; trends, start your day with the Mobile INSIDER. <a href="http://www.businessinsider.com/intelligence/insiders-free-report?IR=T">Get two weeks risk-free</a>If rival smartphone vendors are unable to compete against the likes of Samsung and Apple, their best bet is to shift focus to emerging market countries, where mobile devices are just starting to proliferate. However, Samsung and Apple have already set their eyes on India and Brazil. Their presence will make it increasingly difficult for small vendors, like Lenovo and HTC, to capture first-time buyers in these emerging markets. Here are other stories you need to know from today's Mobile INSIDER:<ul><li>Samsung unveils Galaxy S6 Edge Plus, Galaxy Note 5</li><li>WeChat's growing user base boosts ad revenue</li><li>Companies in the news: Blackberry, Facebook, Cisco Systems</li></ul>Don't miss another day of breaking developments. Stay ahead of the curve and gain insight into the latest news &amp; trends. Join thousands of other professionals who start the day with Mobile INSIDER. <a href="http://www.businessinsider.com/intelligence/insiders-free-report?IR=T">Try any of our INSIDER newsletters for two weeks »</a>

Job cuts signal smartphone market squeeze

<div class="KonaFilter image-container display-table float_right"><div><div class="image on-image">Sean Gallup/Getty Images; Skye Gould/Business InsiderSamir Arora, the cofounder and former CEO of Mode Media</div></div></div>From the winding freeway that links Silicon Valley with San Francisco, the giant Mode Media sign gracing the company's headquarters was a hard-to-miss proclamation alerting passing drivers to an internet success story with a rich, $1 billion valuation.But on the 11th floor of the gleaming building last week, the mood among employees was sour.Those gathered in the office and patched in through a crackly teleconference suddenly learned that they had no more jobs, no more health insurance coverage, and no more access to the company email system. Mode Media, founded in 2003 and once known as Glam Media, was shutting down. Oh, and please hand in your laptops on the way out.People were stunned and shocked, and the management team's final Q&amp;A session with the troops didn't help.Someone asked about severance, one former Mode employee recounted. John Small, the COO, simply responded: "There is no severance. There is no Cobra. There is no company.""They didn't give us sh--," says another Mode employee.The end of Mode, which raised over $200 million in funding and was once on track for an IPO, stands as one of the biggest implosions of the current tech boom and a reminder of how swiftly the good times can come to an end. Even now as the company's assets are being liquidated by a restructuring firm, many company insiders, including numerous executives, say they are in the dark about what is happening. The company has not filed for bankruptcy protection and calls to HR by staffers are not being returned.According to more than a dozen people interviewed by Business Insider, the story of Mode's demise is less of an out-of-the-blue collapse than the culmination of a long-running struggle against a changing market and bitter infighting that pitted a flashy, smooth-talking founder against increasingly wary overseas investors.Hubert Burda Media, the German firm that poured $45 million into Mode as recently as last year, was very influential in convincing the board to shutter the company, according to multiple former Mode executives. In the months leading up to that point though, questions about seemingly inappropriate spending by cofounder and longtime CEO Samir Arora plagued the company, while layoffs and management changes left the organization in disarray. <h2>Lavish lifestyle</h2>Arora started the company in 2003 with a list of accomplishments already under his belt. The India-born entrepreneur had worked at Apple in the early 1990s and founded NetObjects during the first dotcom boom, creating a seminal web development company that IBM acquired for $150 million.The idea behind Mode Media, which first gained attention as Glam, was to create an online hub for editorial content produced by freelance bloggers at minimal cost. Glam's content was targeted at women. And Glam combined the content with an ad serving network that reached a constellation of partner websites, allowing Glam to claim massive reach. In 2015, the company said in a <a href="http://webcache.googleusercontent.com/search?q=cache:PyQFlnNDddUJ:corp.mode.com/mode-media-vaults-into-eigth-position-for-mobile-reach-among-top-100-mobile-properties/+&amp;cd=1&amp;hl=en&amp;ct=clnk&amp;gl=us">press release</a> that it had "over 400 million monthly users worldwide."<div class="KonaFilter image-container display-table float_right"><div><div class="image on-image">Alexei Oreskovic/Business InsiderThe door to Mode's HQ was locked and the receptionist desk empty the day after the shut down</div></div></div>But as the market shifted to programmatic ad serving, in which online ads are bought and sold on automated exchanges, Mode's business began to suffer.So Mode began trying to reinvent itself as company that made its own "advertorial" content, especially videos and native ads. And Arora was leading the charge, with expensive initiatives including launching a printed restaurant guide and videos featuring famous chefs.Mode's revenue had reached about $100 million annually by 2015, but growth had stopped and the company was losing about $10 million a year, according to one former executive.All the former employees we spoke to described Arora as having a smooth, salesman-like personality. He could charm a room and make you believe in whatever his vision was. A penchant for fancy suits and a seemingly lavish lifestyle left an impression on the rank-and-file as well, and rumors circulated about Arora's extravagant personal expenses and his use of company property like houses in the Hamptons and in LA. When Arora and Burda Media began to clash over the direction of the company in 2015, Arora's lavish lifestyle became a focal point. Mode's board of directors, at Burda's urging, initiated an audit that included the expenses Arora billed to the company, according to two former executives. The audit covered things like the company houses in the Hamptons and LA."Any reasonable person would think it was unreasonable," one former exec said. "Homes in the Hamptons and LA, I don't see how you would use it for business use, it's impossible."The audit ultimately cleared Arora of any improprieties, a person familiar with its outcome told us. But the episode underscores the atmosphere of mistrust pervading the company and the power struggle between Arora and Burda.Even though Burda Media was a minority investor who did not technically control the company, the firm gained enough influence on the board to throw its weight around, according to several sources. In April, Arora was ousted as CEO by the board of directors - a move that many sources said was orchestrated by Burda.In an emailed statement, Burda said that Arora left the company "by Board Resolution in April 2016." Arora declined to comment.Marc Andreessen, the internet pioneer who created the web browser, and joined Mode's board in 2011 after selling social network Ning to the company, also left the board in March. Andreessen declined to comment.<h2>Meet the new CEO</h2>Jack Rotolo, a longtime Mode exec, was tapped to be Arora's replacement as CEO in April 2016. He had Burda's backing. But that didn't make his job any easier.<div class="KonaFilter image-container display-table float_right"><div><div class="image on-image">LinkedInJack Rotolo, Mode Media's last CEO</div></div></div>"Jack was put into a really difficult position," a former exec admitted. Every time the team turned around they uncovered another problem regarding the finances and the future.But still: "No one had any confidence in Jack's leadership ability." He wasn't right for the job, another said.A wave of layoffs in June, in which 30 people lost their jobs, caused more turmoil.There was barely any communication. "Senior, senior people in the company were just called into the room with HR and given a packet," a former employee said. "I didn't even see Jack." HR contractors rather than full-time people did the actual firing, the employee said.Rotolo did not respond to requests for comment.Despite the layoffs and several high-level departures following Rotolo's promotion, no one in leadership gave any hints that the company's very future was in question.True, a plan to file for an IPO that began in 2013 had quietly been put on the back burner. But some explained it away as a reflection of a difficult IPO market, or a view that the cost of building the financial infrastructure necessary to go public was better better spent elsewhere.Another former executive told us that the view inside the company was that the IPO was more of an attempt by Arora to get attention for the company, which was not ready to go public.Then all of a sudden, in the third week of September, it all came crashing down.<h2>What went wrong</h2>"The general consensus of the employee base is that there was mismanagement of finances," says one former company executive.But the most simple explanation in the eyes of many is that Burda had lost faith. The firm refused to invest any more money into Mode and ultimately orchestrated the shutdown, according to several insiders.Burda said in a statement that Mode was shut down "due to its lack of economic prospects" and "drastic changes" in the US <keyword id="35666" type="COMPANY" weightage="60" keywordseo="advertising">advertising</keyword> market that made it "impossible" to find new investors. "Mode Media's most serious challenge was the rapidly declining relevance of display advertising in the US. The management didn't succeed in developing further the original business model or to create a promising perspective for the company. Burda and the other investors continuously supported the company. However, the ruptures of the US advertising market were not likely to allow for an improvement of the situation."Burda noted that Mode had been seeking new investors since the Fall of 2015 with the help of Goldman Sachs. "The request for more capital could not be satisfied," the firm said. As a result, Burda continued, "the management of Mode asked for an ABC - an assignment for the benefit of creditors- in September 2016," referring to an out of court alternative to bankruptcy in which a company's assets are sold quickly.Mode retained Sherwood Partners, a Mountain View, California-based restructuring firm whose website lists specialties such as ABC shutdowns which it says can be done with "less notoriety than with a bankruptcy."But there are already questions about one of Mode's main assets - Ning, the social network founded by Marc Andreessen, which Mode acquired for $150 million in 2011. A <a href="http://creators.ning.com/announcements-from-ning/exciting-news-about-ning-cyndx-llc">post on Ning's site last week</a> said that Cyndx, a company led by Mode board member Jim McVeigh has "entered into an agreement with Mode Media to take over the operations of Ning."According to one person with direct knowledge of the matter, Cyndx is one of several companies that have put in bids to acquire Ning, but no deal has closed yet. It's expected to close by the end of the week.<h2>Frantic emails</h2>The shutdown decision appears to have happened with almost no notice, even to senior management.The day after the shut down announcement, one Mode manager of an overseas office described receiving frantic emails from headquarters requesting immediate transfer of all funds and assets back to the US."It was the most unprofessional, unethical experience imaginable, [a] confirmed catastrophe," another exec raged about the shutdown. "It's so catastrophically unethical. No one can believe it."Bloggers who relied on Mode's ad network quickly took to Twitter to complain that they were unable to access their dashboards and that they were still owed significant fees for past work. How a company that raised more than $200 million suddenly went bust is a question that many are still trying to answer. It's possible that during Mode's previous years of operations the company burned through a lot more money than the $10 million it lost in 2015. The extent of creditors to which Mode owes money is also not clear yet.Angelica Malin, a blogger who runs About Time Magazine, said her Mode login portal, where she could normally track things like how much revenue she was meant to receive for her work, gently mocked her with this message: "Try again in 5 minutes," any time she tried.She's not hopeful that she'll recover any money. "I don't think we'll go out chasing it. Would spend more on the lawyer than I'd make probably," she said. <div class="margin-top"> <h3>NOW WATCH: <a href="http://www.businessinsider.com/apple-iphone-7-samsung-galaxy-s7-specs-comparison-2016-9">Here's how the iPhone 7 compares to the Samsung Galaxy S7</a></h3> <div> <div> <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="5keHFyNTE6SqBngTPWssX0hJ0WhONuNJ" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div> </div> </div> </div>

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