BUSINESS

Zirtual, Tech Startup, Fires Entire Staff Over Email, Shuts Down Overnight

08/11/2015 11:58 EDT | Updated 08/11/2015 12:59 EDT
Zirtual

A startup that offered virtual-assistant services has shut down, firing its staff of more than 400 through an email it sent overnight.

Although the Las Vegas-based Zirtual say it has only “paused operations,” the shutdown looks more permanent than that: Its website and Facebook page are no longer available, and its Twitter account has been deleted.

But the most remarkable thing about this shutdown is the way the company informed its staff.

According to former employees who spoke to TheNextWeb.com and Business Insider, Zirtual gave workers no warning of problems at the company, until it sent out an announcement at 1:34 a.m. Monday morning informing them they had lost their jobs.

"I always knew I was going to get my paycheck, until today," former employee Carol Murrah told BI. "I expected to get paid this Friday, and that's not happening."

In an email to clients later Monday, the company offered its “deepest apologies” for the sudden shutdown. But customers say Zirtual’s website was accepting new clients until as little as 13 hours before the company ceased operations.

CEO Believed In Transparency

Maren Kate Donovan, CEO of Zirtual, wasn’t taking press calls Tuesday, but many people on social media are pointing to comments she made in an article in Fortune magazine just last month, in which she stressed the importance of keeping employees informed.

My team is without a doubt my biggest asset, which is something I never take for granted. So it’s vital to keep them in the loop during periods of change and consistently show support. Because what my employees don’t know could ultimately hurt the entire business. The sooner your team knows about upcoming shifts in the company—the better.

The company, which launched in 2011, had raised $5.5 million from numerous investors such as Zappos founder Tony Hsieh.

Some former employees told Business Insider the company may have been growing too quickly in recent months, going on a hiring spree that took its head count to more than 400 from 150.

Some of Zirtual’s competitors in the virtual-assistant field scrambled to assure customers and investors that the industry is secure.

“We ... want to assure former Zirtual clients that the proposition of highly reliable virtual assistant service is not a broken promise,” Red Butler CEO Daniel Abas said in a statement.

“The very real value of on-demand support for individual executives and working teams is still achievable. But the economics of business models in our on-demand service segment are clearly shaking out.”

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