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Struggling Angie's List lays off 97 salespeople

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Indianapolis-based consumer review firm Angie’s List Inc. on Friday laid off 97 members of its sales force, the firm told federal regulators.

The move came “as part of a focus on improving salesforce performance and productivity,” the firm reported to the U.S. Securities and Exchange Commission.

“It is extremely difficult to make a business decision that will have an impact on our colleagues and their families," Chief Operating Office Mark Howell said in a prepared statement.

"This painful step is part of an overall plan to improve our sales productivity and performance and establish a new performance-based measurement system by which we will evaluate our sales teams," Howell said.

Prior to Friday's layoffs, the firm's most recently disclosed employment number was around 2,000 workers, about 1,200 of which were in sales, according to a spokeswoman.

The firm’s sales force has become a big focus of its overall strategy. Angie's List primarily is known a subscription service in which participants can buy annual memberships in order to find and review service providers like plumbers, roofers and electricians. The revenue mix has shifted in recent years toward selling ads to those service providers.

One of those provider-driven avenues is e-commerce, which allows service providers to offer online deals directly to members. Angie's List said Friday that the biggest percentage of layoffs was coming from its sales team for Big Deal, in which users can sign up for heavily discounted services from providers—similar to Groupon.

In its most recent financial quarter, the company lost $18.4 million. That represented a significant dip from the same quarter in 2013, during which the firm lost $14.3 million.

It has not earned an annual profit in its 19 years in business. Its share price has fallen 47 percent since Jan. 1, to $8.08 early Friday afternoon.

Howell said that the business remains sound.

"We are focused on continuing to make progress on our strategy," he said. "We expect to continue to add resources to our salesforce over time to support growth in both advertising and e-commerce revenue."

Angie's List recently reported that total paid memberships reached 2.8 million as of June 30, a rise of 31 percent over a year earlier.

While a pioneer in consumer reviews of service contractors, Angie’s List has faced increased competition in recent years from rivals such as Yelp, Porch.com and Google Local.  Unlike Angie's List, those sites don’t require consumers to purchase paid memberships.

Over several years, the percentage of revenue from member subscriptions has declined as the firm has focused on selling ads to service providers. As far back as six years ago, Angie’s got 47 percent of revenue from membership and the other 53 percent from service providers they review.

By the time of Angie’s 2011 initial public stock offering, service-provider revenue had grown to 63 percent of total revenue, and hit 69 percent during 2012.

Investors have debated
over the firm's prospects for years. Doubters point to its desutory record on profits. Believers say Angie’s List’s years of spending massively to secure new subscribers and sign up service providers as advertisers is about to position it for robust long-term profits in a niche it dominates.

The company has received city and state financial incentives to help fund its growth. For example, in 2011, it announced that it planned to nearly double its local workforce by hiring an additional 500 employees at its corporate campus on the east side of downtown. State officials pledged as much as $7 million in tax credits, based on those plans.

The city of Indianapolis also pledged about $7 million in incentives, including about $4.6 million to help buy properties near its campus.

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  • Selling Snakeoil
    AP had very insightful comments. Here is my favorite article about the leadership at Angie's List. http://advanceindiana.blogspot.com/2013/05/ibj-exposes-self-dealing-by-angies-list.html
  • Please continue, Steve..
    We would really like to know, Steve. I have heard quite a bit in the past year concerning spending habits, information provided for the IPO, etc. I realize you have to be careful about what you say, but I spend a lot of money advertising with them and I'm starting to wonder if I should be concerned?
  • Losing Money
    All you have to know about Angie's List is that in in 20 years, AL turned a profit in only one quarter. In other words, AL lost money in 79 of 80 quarters. I don't think any company has ever managed that level of futility.
  • Yes Angie's List Received Taxpayer Subsidy
    IndyBizExec, Contrary to your insistence government isn't writing checks to Angie's List, IBJ reported last year that Angie's List received a $4.6 million subsidy from taxpayers.
  • LOL
    It's funny how people that no nothing speak on things as if they are experts. As one of the 97 so called boatriders. I can tell you factually that I ended 2013 at 115% to plan.On top of that I brought in 170,000 in new advertising revenue that year. So far in 2014 I was 113% to plan and at the time of my dismal i was at 136% with 9 days left. These were business decisions plan and simple I have no ill will towards the company at all. But comments and thoughts like this make it tougher for my future job prospect. It was not a low man on the totem pole layoff!!!
  • I work at AL and I love it!
    It is the best place I have worked in my 20 plus year career! I love the culture, the awesome things we get to do with business owners to help them grow their business. Being a part of downtown Indianapolis is incredible. Thank you Angie!
  • Jobs
    Maybe they're not making money but they are hiring and putting money into Indy residents. I live on south port and it's hard to run into someone weekly who doesn't work for Angies list. I think they bought the sinking landmark building as well. These 97 out of the 2100 are probably sales rep that were riding the boat and not converting. Sales jobs are mostly all based on performance.
    • Annual staff paring
      Go back and look. Most years, in late summer or early fall, AL pares staff. The end of summer means the end of home improvement season, business slows and voila! More Layoffs. Most media in this town are in love with the Angie mirage. Credit to the IBJ for casting at least an honest eye to an outdated, overleveraged house of cards.
    • Former Employee
      If you only knew....
      • Ponzi pricing
        I quit my membership a year ago when I realized they charge significantly more to established customers on the assumption they don't notice. Moreover you can't quit midstream, if you go past the renewal date your hooked for another year. We'll you can raise a ruckus and maybe be able to cancel. They run the business in desperation mode. Now to the extent they earn the bulk of their revenue from advertising, how independent are their ratings? Maybe some of those laid off employees can enlighten us.
        • Are people really that ignorant
          I don't work for Angie's List or own their stock. However, I'm amazed that people here seem to think that the government is writing checks to AL. It doesn't work that way. At best, a business gets a small break on future taxes in exchange for future hires. The numbers published are just a way for the politicians to take credit for planned expansion. If it doesn't happen, the company gets nothing.
        • From 2013
          This statement was in Angie's Lists 2013 10-k filing: "In addition, in our efforts to increase revenue as the number of members has grown, we have expanded and expect to continue to expand our sales personnel." Stupid. So, the thinking apparently was that more employees equals more revenue? Why take on additional overhead during bad times? Clearly, the strategy didn't work, and AL is bleeding and attempting to minimize operating costs. AL only has itself to blame for these layoffs.
        • Free Market
          Is the argument from the gallery here really that AL is being artificially propped up by Gov handouts at the taxpayer's detrement and is not going to sink or swim by the free market. They generate hundreds of millions through operating revenue and equity from investors? Put all of the tax $ invested in the project together and you dont even get enough to cover what the company manages to lose in a quarter. The company has spent a lot of money revitalizing an area that no other private entity is putting a dime into and a lot of that has been catalyzed by local support. That spending does actually have a public benefit that residents of the surrounding neighborhood and private developers starting to inch their way toward that part of town are realizing gains from.
        • Free Markets Anyone?
          What does capitalism have to do with modern finance?
          • Not the same
            By the way, obviously not the same Sam as the one that claims AL is not "depending on capitalism".
          • Capitalism at Work
            Seriously? It is because of capitalism and modern finance practices that AL is able to stay afloat and make investors believe that somehow they are making money by losing money. $7 million from local government vs $140 million from their IPO. Is it really tax dollars that are propping them up?
            • Another Handout
              Corporate welfare at its' worst.
            • Time to Send out Resumes
              I hope the other employees view this as a warning. Angie's List is a sinking ship.
            • Good Luck
              A company that has never made an annual profit in 19 years in biz....AND we give them more money?? When does one say 'this model is not working, we do not have a viable business idea, time to scrap and move on" If they had to depend on capitalism the money would have ran out long ago, but somehow the taxpayer keeps them afloat.
            • Taxpayer Funding
              Most of the tax payer credits and gifts are contingent on meeting goals. It would be interesting follow up to the article to follow the money trail on this tax credit to see if it was actually provided and objectives were met. But, quite frankly, you are probably giving the IBJ too much credit to expect they them to read your suggestions and actually enhance their reporting.
            • WHAT???
              I agree, JJ. I just finished reading about the city giving Angie's List 7.1 mil to expand, hire 500 people. Was I dreaming? Now they report Angie's List is "struggling" and laying off??? WHAT???
            • Let me see
              The article should include the money the city and state his given AG's list for property and training. Are the promises of jobs fulfilled? Will Angie every give back or loose the millions they have received from their buds?

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              1. How much you wanna bet, that 70% of the jobs created there (after construction) are minimum wage? And Harvey is correct, the vast majority of residents in this project will drive to their jobs, and to think otherwise, is like Harvey says, a pipe dream. Someone working at a restaurant or retail store will not be able to afford living there. What ever happened to people who wanted to build buildings, paying for it themselves? Not a fan of these tax deals.

              2. Uh, no GeorgeP. The project is supposed to bring on 1,000 jobs and those people along with the people that will be living in the new residential will be driving to their jobs. The walkable stuff is a pipe dream. Besides, walkable is defined as having all daily necessities within 1/2 mile. That's not the case here. Never will be.

              3. Brad is on to something there. The merger of the Formula E and IndyCar Series would give IndyCar access to International markets and Formula E access the Indianapolis 500, not to mention some other events in the USA. Maybe after 2016 but before the new Dallara is rolled out for 2018. This give IndyCar two more seasons to run the DW12 and Formula E to get charged up, pun intended. Then shock the racing world, pun intended, but making the 101st Indianapolis 500 a stellar, groundbreaking event: The first all-electric Indy 500, and use that platform to promote the future of the sport.

              4. No, HarveyF, the exact opposite. Greater density and closeness to retail and everyday necessities reduces traffic. When one has to drive miles for necessities, all those cars are on the roads for many miles. When reasonable density is built, low rise in this case, in the middle of a thriving retail area, one has to drive far less, actually reducing the number of cars on the road.

              5. The Indy Star announced today the appointment of a new Beverage Reporter! So instead of insightful reports on Indy pro sports and Indiana college teams, you now get to read stories about the 432nd new brewery open or some obscure Hoosier winery winning a county fair blue ribbon. Yep, that's the coverage we Star readers crave. Not.

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