Zirtual lays off 400 employees with a last-minute email

The online startup folded quickly, and employees were sent scrambling to find new jobs. However, Startups.co is taking over the company, and services resume on Monday.

Just as Pets.com came to symbolize the collapse of the dot com boom of the early 2000s, Zirtual may one day come to represent the eventual demise of the startup fervor.

Sure, startup companies will never go away as long as there are entrepreneurs with ideas and capital, but the virtual assistant company Zirtual represents what can go wrong.

At 1:34 a.m. on Monday, the company sent an announcement to its 400 employees that they had all lost their jobs.

It literally folded overnight.

The company’s Twitter account was deleted, and its website and Facebook page are no longer available.

Employees didn’t take the news well:

What makes the whole matter so sadly ironic is that Zirtual’s CEO, Maren Kate Donovan, had stressed the importance of employee communication in a column for Fortune magazine last month:

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.

Her management tips also addressed company morale.

“Performing frequent status checks of your team’s morale is important to the success of your team’s unity and overall productivity,” she wrote.

Download this free white paper to discover smart ways to measure your internal communications and link your efforts to business goals.

Donovan issued the following statement after Zirtual’s “pause in operations”:

The decision to pause operations was the most difficult message I’ve ever had to deliver. I have spent every waking hour over the past four years working to build the most vibrant community of empowered workers only to have to let them know at once that we could no longer service them.

Donovan also told Business Insider that the reason for Zirtual’s sudden collapse was “burn,” meaning the company scaled too quickly and spent more than it had raised in a short amount of time.

However, there’s good news for Zirtual’s clients and some of its employees.

On Tuesday night, Startups.co announced that it was taking over the Zirtual, and services will restart on Aug. 17. Wil Schroter, the CEO of Startups.co, said the company would decide how many employees they can keep within the next several weeks.

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