SimplyHired Layoffs – What does it mean to the job board industry?

This morning, March 23, I learned that SimplyHired went through a round of Lay-offs on February 2, 2012, as announced on Venture Beat.

When I first heard the news, I did a search on Google, Ere.net, and Jobboarders, and didn’t find any news of the SimplyHired Layoffs. That’s pretty strange to me, considering that SimplyHired is one of the most heavily Venture Capital funded job boards ($22 Million), is strategically partnered with LinkedIn, (a major shareholder from what I hear), and has become a major partner for many job board owners, who either purchase pay-per-click advertising, or partner with the them via their Jobamatic product.

The SimplyHired layoffs apparently included the President/COO Dion Lim, VP of Sales Brian Corey, and most of the sales team.

What does this mean to the job board industry and the future of SimplyHired?
SimplyHired CEO, Gautam Godhwani, emailed VentureBeat, stating “As part of its 2012 strategy, Simply Hired made some changes to its organization.”

As one of the first internet job board founders, www.gojobs.com, the owner of a SimplyHired partnered job board SpeechJobs.org, and a partner of SimplyHired’s two primary PPC competitors, Indeed.com and Topusajobs.com, I’m not surprised by the reorganization.

SimplyHired.com is a great service for both job seekers and employers.
The pay-per-click (ppc) employment advertising niche is a very cost effective, and, in my opinion, one of the most under-utilized advertising options for employers.

From my experience the reorganization was a necessary step.

SimplyHired is not going away anytime soon, I think they just needed to trim their overhead and refocus. Indeed, SimplyHired’s biggest competitor in the ppc employment advertising niche, has done a better job of executing in this small segment of employment advertising.

Unfortunately, with venture capital backing, there are really only two exit strategies for SimplyHired’s investors, go public, or sell. SimplyHired’s CEO, Gautam Godhwani, did what is probably required. With the possibility of going public not very realistic, the next best option is to raise the profitability in the hopes of increasing the multiple for a future acquisition.

Will that acquisition come from Monster or maybe even LinkedIn? With Monster up for sale, I don’t think they are in acquisition mode, so that leaves LinkedIn as one of the few natural alternatives. But, that being said, LinkedIn, is probably better off buying Monster than SimplyHired.

What are your thoughts?

Comments

  1. Robert Elbar says:

    Curious what your source is regarding LinkedIn being an investor in Simplyhired? I’ve never seen that before?

    Hi Robert,
    I’m not sure where I heard that.
    It was several years ago, within the first couple years of the company. I believe it was from a former employee who hasn’t worked there in a long time. I could be wrong, because I don’t have access to the funding information.

  2. We’re regularly called and meet with the other PPC aggregators. They ask for our business. They work to convince us that they can deliver quality traffic at a competitive price. They do their best to prove to us that they’ll provide to us a positive return on our investment.

    In contrast, we’ve asked SimplyHired over and over again to sell PPC postings to us. We’re either told no with no real explanation or our questions are met with deafening silence. Maybe our experience isn’t as unusual as I thought. If there are a lot of other potential customers they’re refusing to work with, that would explain a lot.

  3. Could it be that SimplyHired decided to spend more resources elsewhere (ads, tech features, SEO) and less resources on sales personnel?

  4. LinkedIn is making small holes in sites like Simply Hired massive holes. They could never get the algorithm right at SH yet they would blame the sales team for not being able to sell what is a measurable yet not particularly effective recruiting resource. When results can be measured by companies willing to try a site like SH and the results are not strong how in the world would management expect the sales team to increase revenue from a new customer? Smoke and mirrors only get you so far guys.

  5. Dennis, This is certainly possible.
    The only problem is if you fire your COO and VP of Sales, and most of your sales team, this probably means you are taking a major change in direction.
    I don’t know what SimplyHired’s revenues are but I don’t think they can make much of a profit with 92 people on staff.
    * Their website traffic is only 25% of Indeed’s (per compete.com which is unanimously incorrect for all sites).
    * As an aggregator, their primary business model relies on website visitor arbitrage… bring in job seekers for X and Sell the clicks for Y. Then, they need to take live off the margin.
    * While their Search Engine Optimization (SEO) strategy is one of the best in the industry, it’s no way near as good as it needs to be to compete with Indeed. Indeed’s cost of job seeker acquisition is much cheaper than SimplyHired’s.
    * One of the biggest challenges for any aggregator is generating clicks, and ultimately applicants for employers. When an employer posts a job on Monster (or any other major job board), the job board automatically sends out alerts to hundreds of thousands of job seekers about the position, (ie. job alerts). This is one of the cheapest methods of maintaining job seeker visits. Unfortunately, between the LinkedIn and SimplyHired partnership, and their SEO campaign, that wasn’t effectively implemented until much later than Indeed’s, they’ve never been able to drive the number of candidates that Indeed has, on an aggregate job posting basis. As a result, they’ve had a tougher go at getting employer traction.

  6. Kyle, Great comment. I actually heard similar comments from other former SimplyHired staff. It seems Indeed continued to put money into building the search engine and algorithms, while SimplyHired did not, or not to the same level. Maybe that is part of the issue. Heck, Monster bought their search engine instead of developing it inside.

  7. Something is certainly going on over there… We ran a local job board, http://www.lanonprofitcareers.com, and have in the past worked with SH. However, we decided to work exclusively with Indeed for a spell. Last month, we decided to give SH another shot. You’re not going to believe what I went through just to get someone on the phone.

    First of all, they’ve changed their phone number and didn’t add a forwarding number to the automatic message…red flag #1. Secondly, my staff sent them at three messages within their contact-customer service page with no reply at all…over a two or three period…red flag #2. Thirdly, since we added money to our account, prematurely it seems, without responses, I decided to tweet them…which required at least two tweets…red flag #3. I was finally given a number: 408-400-4700 to call. I called a left a message and was never called back…red flag #4. After numerous tries, I finally got someone on the phone and proceeded to explain that even though we’ve added money to our account, SH hasn’t crawl our job board in over 3 weeks. She proceeded to tell me SH has very strict guideline and that likely our site didn’t meet them…I laughed and said we had been a customer for over two years and that we seem to fit Indeeds guidelines. She then suggested I read their guidelines to be sure…WTF!?! I asked her if she was serious. I then told her my ordeal in just getting someone on the phone. Get this: She said she already knew…that she is SH’s social media person and that she was the one who tweeted me the phone number…red flag #5. Stunned, I asked why is she answering the customer service line. No answer. In any case, I asked how can get my site crawled, being too stunned to think clearly. She said someone will get back to me…red flag #6. Finally awakened, I said, “Look, we have money in our account and we’d like it back if you can’t find the people to fix it. She said she’d have someone send us our money as soon as possible…red flag #7. She was more interested in getting me off the phone and returning our money than attempting to find someone to fix their crawler problem. Feeling bad for her, I then asked her if they going out of business because this is likely the worse customer services I’ve encountered in years. Hitting a nerve, she immediately denied they were going out of business…a little too fast…like the answer was cocked and already in the chamber.

    All of this to say that something not so good is going on at SimplyHired. That I can tell you. Btw, this all happened today. So, I decided to search the net to see if my fears were correct…it seems so…

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