AFCV Holdings, a portfolio company of growth equity investor Summit Partners, is axing the majority of people working for Q&A site Answers.com parent company Answers Corporation, which it acquired earlier this year for $127 million in cash.
According to Israeli business paper Calcalist, 45 out of 65 employees in the company’s offices in Israel were fired, including founder and CEO Bob Rosenschein and CTO Jeff Schneiderman. Another 25 employees or so work out of the United States, but it remains unclear if all of them have also been given a pink slip.
I just spoke to Answers.com VP General Counsel & Corporate Secretary Caleb Chill on the phone, and he confirmed the layoffs. He wouldn’t go into too many details about the number of people being let go, but confirmed that it concerns more than half of the current workforce.
Asked about the number of people who worked for Answers.com last week, Chill said there were around 90. He also confirmed that Rosenschein and Schneiderman were let go, but refused to name the other executives who got cut because some have not yet been notified.
Rosenschein also got back to my request for comment and says he’s leaving “on good terms”.
According to Chill, Answers.com remains committed to its user community, but it will be discontinuing a number of products such as 1-Click Answers and AnswerTips, and in addition quit investing in a number of mobile apps.
Here’s how all this sounds officially:
AFCV today announced a restructuring of global operations to complete the integration of its April 2011 acquisition of Answers.com. As part of the reorganization, CEO Bob Rosenschein and certain executives will be stepping down as the company significantly reduces its workforce to sharpen focus on key product and community initiatives as outlined at the time of the acquisition.
The restructuring has largely been driven by the following factors: 1) Answers.com is no longer a publicly traded company and thus no longer needs the supporting infrastructure, 2) Answers.com will no longer support a number of independent product initiatives (such as 1-Click Answers, AnswerTips and Widget Gallery), and 3) Answers.com will discontinue investment in certain mobile applications.
Answers.com remains committed to supporting community of users through this transition process.
Answers.com was acquired by AFCV Holdings earlier this year after 6 years on NASDAQ, at a 33 percent premium over the company’s average closing stock price over 90 days prior to the announcement of the deal. But shareholders were very unhappy with the terms of the deal, claiming it tremendously undervalued Answers.com, and tried to block the sale.
Shortly after they did, a U.S. court denied a motion for a preliminary injunction to enjoin the special meeting of stockholders to vote on the merger agreement, however, and thus the acquisition was closed on April 14, 2011. Now, roughly 11 weeks later, Answers Corporation’s brand new owner effectively gutted the company, raising doubts about its long-term viability.