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Whisper, the company behind the anonymous social app of the same name, quietly laid off 20 percent of its staff on Wednesday in a cost-cutting effort, according to multiple sources.
The company’s COO, Jaime Mendez, is also leaving the company, though it was described to Recode by a source as a mutual agreement to separate, not a firing. The departures together raise questions about Whisper’s financial footing.
Whisper, led by CEO Michael Heyward, laid off 14 of the company’s 71 employees, with cuts focused primarily on Whisper’s editorial, marketing and ad sales teams. Whisper is moving toward a more automated process for the work those teams did — using algorithms to create content from user posts and ad networks to sell and serve ads on its properties.
Employees were not given an explanation for their firing, according to one of the individuals laid off. And even though Mendez is leaving the company next week, this person said, he was still performing exit interviews for his 14 co-workers being ousted.
But the overall plan is to try and cut costs in an effort to get the company profitable, according to a source close to the company.
“It’s unfortunate that a company that’s main product is human empathy,” said the fired employee. “And here’s this ironic moment in its history of having to cut its staff in order to get closer to profitability.”
Whisper, which was founded in 2012, has survived despite the death of other anonymous apps that launched around the same time, like Secret and Yik Yak. Whisper’s approach has been to partner with media companies to help them find content from Whisper’s user base, or create slideshows or videos from user posts that are then distributed by publishing partners.
It also sells ads and shows them to the site’s 20 million monthly users. The company had ad sales of $1.3 million last month, according to this source.
Mendez had served as COO since September of last year, according to his LinkedIn page. He previously worked as Whisper’s VP of product.
Whisper has raised more than $60 million and reportedly was back on the fundraising circuit as of last September. Financial backers have included Sequoia Capital, Lightspeed Venture Partners and Shasta Ventures.
We reached out to Mendez and Heyward for comment.
Update: This story has been updated to include a statement from a former employee and more details on the layoffs.
This article originally appeared on Recode.net.
