Former Messenger staffers file class-action lawsuit over news site shutdown
The Messenger was sued in a class action lawsuit by former employees Thursday, a day after the company shuttered, leaving roughly 300 people without jobs, or severance pay, according to the suit.
Why it matters: The lawsuit adds to the drama surrounding the sudden closure of the news site — which burned $50 million in cash in a few months after launching, leading to its demise.
Details: The lawsuit, filed in the Southern District of New York, accuses The Messenger and its CEO Jimmy Finkelstein of violating the Worker Adjustment and Retraining Notification (WARN) Act, which requires large employers to give advance notice of large-scale layoffs of New York employees.
- The Act was designed to help workers find new jobs before losing their current positions.
- "Plaintiff and all similarly situated employees seek to recover up to 60 days wages and benefits," the lawsuit states.
What they're saying: A company spokesperson said "we have no such knowledge" of the lawsuit, which The Daily Beast first reported on.
Be smart: Employees found out Wednesday via media reports that they were losing their jobs, as the lawsuit notes.
- They later learned that they wouldn't be receiving any severance or further health care coverage.
- The company's website was abruptly removed later Wednesday night, before journalists were able to go back and access copies of their work.
The big picture: The Messenger's closure marks one of the biggest media failures of the internet era. Worse, the demise was foreseeable — and foreseen.
Thought bubble: The site was built on the flawed premise that a big, generic news audience has value. It doesn't anymore.
- The company, which was losing tens of millions of dollars, only brought in around $3 million in revenue last year, according to financial documents seen by Axios.
- In recent weeks, Finkelstein scrambled to raise the cash necessary to keep the business afloat for several more months, sources told Axios, but ultimately failed to close a deal by the time the firm's last dollars dried up on Wednesday.
Editor's note: This article has been updated with more details from the lawsuit.