Buystream fails to get funding, cuts 40% of staff
Buystream Inc., which provides analytic software and services to e-retailers, has laid off 23 persons, or 40% of its 58-member staff in a move it says will bring it to profitability sooner. The company has closed its Austin, Texas, office and consolidated its Toronto and Ottawa offices. The layoffs follow a round of layoffs in March, when anticipated funding from key investor Safeguard Scientifics Inc. didn’t materialize. “Good faith discussions are still ongoing with Safeguard for funding of an undisclosed amount,” says Buystream’s Randy Woods, who has added CEO to his existing title of president. “But we had to make the decision that we couldn’t operate in an environment of that kind of uncertainty about financing.”
As part of the shakeup, former CEO Shannon Ryan steps aside to make room for Woods. Ryan will remain chairman, while focusing on business development. The cuts affected all divisions and reduced the sales staff by a third. Yet Woods says the workforce reduction has resulted in no client losses. “In fact, we are having considerable success among catalogers and click-and-mortar retailers in our last quarter,” he says, noting the this month, the company added cataloger Lillian Vernon to its client roster. However, Woods points out, the decision -making cycle for such retailers is longer than for the pure-play dot-coms Buystream initially targeted. “It comes down to controlling our cash burn rate and making sure we get to a break-even point as quickly as possible,” he says.
To speed up the path to profitability, Buystream is broadening its focus with plans to roll out a new product that will move the e-retail-focused company into additional markets. The product, its name not yet disclosed, is aimed at telecommunications companies and will offer Buystream`s reporting and analytics capabilities to help them understand the success or failure of their mobile browsing initiatives, says Woods. It’s expected to launch at the end of August.
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