Lyris Slashes Staff; Changes Course, Sources Say
By Ken Magill
As part of a significant shift in competitive direction, marketing-services provider Lyris on August 27 laid off more than 40 employees, according to multiple sources within the company.
That’s a “big number from the 290 the company had,” wrote one anonymous tipster who reached The Magill Report via email from an anonymous account.
He or she reported the number of employees laid off as 43. Another source, also from within Lyris, verified the layoffs but reported the number at 45.
The move is part of plan to take the company “up market” by shifting from small-business accounts to focusing on larger businesses in an effort to compete with the likes of Responsys, the email source wrote.
“The essential product is dead,” he or she wrote, referring to a low-end version of Lyris-HQ aimed at low-volume mailers. When asked what he or she meant by “dead,” the source responded: “Sales will not be selling it. It simply not be promoted and, therefore, fade away.”
The layoffs came just days after Lyris named as its new CEO 38-year-old Wolfgang Maasberg and announced the resignation of the firm’s previous CEO Luis Rivera.
“There was a new CEO brought in and less than 5 days into the job we get a layoff,” wrote the email tipster. “Rumors are running wild.”
According to a document filed with the Securities and Exchange Commission, Maasberg signed a three-year deal with Lyris under which he will be paid $350,000 annually and is eligible for a $100,000 bonus in 2011, $30,000 of which is guaranteed. He will also receive a further $10,000 per month for 18 months as a signing bonus and for relocation, the document said.
Lyris also gave Maasberg an option to buy 1.5 million shares of company common stock for 33 cents a share, and 4.5 million shares of restricted stock. The restricted shares will vest over four years, according to Maasberg’s contract.
According to Lyris, Maasberg has served as vice president sales, Americas, of the Omniture business unit at Adobe Systems, Inc. since its January 2010 acquisition of Omniture. From May 2005 to January 2010, Maasberg served in various senior sales management positions at Omniture, according to Lyris.
“Wolfgang has a strong record of accomplishments with Omniture and Adobe, which we think is an experience base that can take Lyris to the next level,” said Ty Comfort, chairman of Lyris’s board of directors, in a statement.
Besides a shift in competitive strategy, word among the company rank and file is that Lyris is gearing up for a sale and slashed staff in order to look more attractive to potential buyers, according to sources.
The recent layoffs were most heavy in services and support with a few in engineering and some in product management, wrote the source who contacted The Magill Report through e-mail.
“I do not believe any came from sales,” wrote the source. “The biggest issue now is that everyone is looking for a new job.”
Lyris’s director, investor relations, Rich McDonald, did not to respond to an e-mail sent Sept. 2 and a voicemail message left on Sept. 3 asking for comment.