So Jason Calacanis has brought down the hammer on some employees at Mahalo, his “people-powered search” startup — and took the extraordinary step of returning to blogging momentarily to announce the news, after having made a big show of turning his back on it. In typical Jason fashion, he even included what is becoming a kind of blogosphere in-joke: The headline of his post is “Tough times; hard decisions,” a wording that Techmeme’s Gabe Rivera notes is becoming a recurring theme. And if you think Jason didn’t know that, then you don’t know Jason Calacanis.

The cuts at Mahalo aren’t really that surprising, given Jason’s widely-circulated email newsletter about how the downturn is going to hit startups hard (something Ashkan of WatchMojo thinks was a clear sign layoffs were coming at Mahalo). But how many people did he actually cut, and why? That’s a murky question indeed. Some reports said 30 per cent of the staff were shown the door, and Nick Carlson at Silicon Alley Insider said 11 out of 20 (or maybe 25), which is closer to 50 per cent. TechCrunch said 10 per cent, which is the number Jason uses.

But it’s worth wondering just who is included in those staffing numbers. It’s not clear, for example, whether they include the 20-odd people working in the Manila office in the Philippines, the ones Allen Stern of Centernetworks mentions in his post (complete with a photo, which now appears to have been removed from Flickr). Some sources say that the number of full-time paid employees has been cut by 50 per cent, leaving a small number along with unpaid volunteers and freelancers on contract.

Regardless of the number, is it enough to get Mahalo the kind of scale that will make it a viable search site? I think Ash has a point when he says that the company’s current strategy pretty much consists of trying to whip together links and a blurb about whatever is hot on Google Trends, and then hope that Google indexes it quickly and it shows up high in search results. Is that a viable strategy? I confess that I don’t really know.


Erick Schonfeld at TechCrunch has posted the text of Jason’s email newsletter, despite the fact that the email specifically says “Do Not Reprint.” As Erick notes in a comment on his post: “He is the CEO of a startup that just went through a layoff today, and he emailed his thoughts on the matter to almost 9,000 people. This is not a private email.” Jason then steps in to ask that it be taken down, and threatens to send a DMCA takedown notice to TechCrunch’s ISP (something he has reportedly done to others in the past for similar reasons). Mike Arrington’s response is here.

About the author

Mathew 2430 posts

I'm a Toronto-based senior writer with Fortune magazine, and my favorite things to write about are social technology, media and the evolution of online behavior

10 Responses to “Mahalo now means “goodbye””
  1. Great Post..

    Stay tuned with more tech layoffs here; http://www.fuckedstartups.com

    The video is hilarious FYI

    Keep it up

    FS Team

  2. […] are some good posts on the layoff – Ashkan at HipMoJo and Mathew Ingram. Possibly related posts: (automatically generated)Jason Calacanis on Video with Steve GillmorVespas […]

  3. This entire episode is just a PR stunt, Jason's SEO play needs clicks to survive

    I've noticed that NO ONE is asking him to keep the Team together because they love and need the service

  4. […] as I look at cuts taking place all over the tech world it kind of surprises […]

  5. […] a bad time to do a startup.  While the web 2.0 flops are bunkering down for the winter and trying to figure out what to do, Andy is developing a real business going after a real […]

  6. Jason good luck to you and the folks at Mahalo. I was there in 91and restructured a business (with revenue and substantial margin) to hit the breakeven ahead of the recession curve.
    We won and those that we laid off were strong and went on, many stronger than they were before, You can't fuck around with this or you end up with the death of a thousand cuts.
    Work out what your cost base has to be, work out what has to be done and the best team that you have (not necessarily the most senior or fun to be with) to get that job done and for sure stay avoid the potential sob stories and get on with it. The quicker the faster ther better.
    We came out the other side bigger better and stronger.
    The world is not coming to an end. If what you do is truly valuable you will survive this trial by ordeal.
    Be honest with your investors and creditors they need to share in both the up and down. side.
    By all means renegotiate that lease and the option program but most of all stop navel gazing and get back on with the the business that you have a mandate to deliver.

  7. This is really a tough issue. Here, at our place, even those good (INTEL) companies needs to cut down their people.

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