Nobody is Dancing At ChaCha. One Third Of Employees Get Pink Slips, Salary Cuts For The Rest

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Mobile Q&A answer service ChaCha is shedding one third of its employees. We’ve confirmed with the company that it laid off 25 people, leaving it with 56 employees. ChaCha cited the layoffs as necessary to ensure profitability in the future. The layoffs have been added to the TechCrunch layoff tracker. From one tipster who says she was let go today:

Wanted to drop you a quick line informing you of layoffs at ChaCha today. There were 25 people layed off, leaving the company with 56 employees. Some very high ranking people were let go today, including 2 Directors of Development, the Vice President of Engineering, 2 Product Managers, a Sr. Director of Product Management, Director of Marketing Communications, 2 Linux System admins, and a Senior Program Manager. These were some of the larger layoffs. The rest of the company will also be taking a 10% decrease in pay, along with Upper MGMT taking larger cuts.

The news today about the $12 million is a ruse. Its just confirmation of a round we closed back in October.

These cuts come in the face of a drowning company. The ex VP of Mobile Ad Sales at Yahoo, Rob Wilk, has been in the NYC offices for 8 weeks now, and has not closed one single deal for any advertising on ChaCha’s platform. After I was let go, there was a company meeting in which Scott Jones layed out a pretty bleak estimate for the coming times. If the company can’t get to a crossover point and make money in 2 months, the whole thing is over.

Strangely, ChaCha hid the layoffs in a press release announcing a $12 million equity financing round, which may or may not be an extension of the $30 million round we reported on in January. (We are awaiting more details)

UPDATE: ChaCha informed us that they never officially announced their C funding round, but the amount was approximately $15 million and closed in October 2008. The company closed their $12 million Series D round last week, with funding from Morton Meyerson, Scott Jones and other investors.

We haven’t been big fans of ChaCha in the past and cited many reasons why the startup needs to reevaluate its business model. Still, the company was growing on us and their occasional snafu was always entertaining.

UPDATE: ChaCha issued this response to the tipster’s assertions about Rob Wilk: “Rob Wilk was a top performing advertising sales leader for Yahoo and he is leading an advertising sales effort for ChaCha that is resulting in significant revenue growth each month. Rob started 6 weeks ago and opened our New York office.”

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