Mahalo CEO Jason Calacanis blogged (ironically given that he publicly quit blogging) that the decision was due to the economic crisis and the expected reduction in online advertising growth.
The main job cuts have come from Mahalo’s editorial department, with Calacanis noting the switch towards “freelance positions over in-house editors.” Other savings will be made through reducing office space through renting desks; apparently Mahalo currently has 6 offices in Santa Monica.
Mahalo’s editorial staff were the backbone of the search side of Mahalo, so it’s no great surprise that their numbers have been cut, economic issues or not, given the switch of Mahalo to primarily a blog content play. If the switch to freelancers sounds familiar it should be: it’s how Calacanis grew Weblogs Inc, driving the establishment of “blogging jobs” back in the days where such positions rarely existed.
His bizarre I’m not blogging anymore PR stunt aside, Calacanis knows blogging and knows how to get the most from bloggers at low rates of pay compared to full time employees, so although others may be skeptical about Mahalo’s chances, I’m not one of those people. The cuts make sense, even if we feel bad for those who are out of a job today.