Angie's List lays off sales staff amid declining revenue

Angie's List Inc. is reducing its sales staff as the company struggles to generate revenue under its new business model.

The company on Thursday laid off about 70 members of its sales staff as part of "right-sizing" efforts, said Leslie Arena, the company's vice president of investor relations. All of the employees were based in Indianapolis.

The affected workers were members of the sales staff who worked with Angie's List's service providers. Angie's List provides online user-generated ratings of service providers in more than 700 categories. 

Angie's List in recent months has combined its product and technology groups, and implemented an "automation of workflow," which Arena said led to the reduction in sales jobs. She declined to elaborate on that process.

The move comes almost one month after Angie's List agreed to be acquired by HomeAdvisor parent company IAC in a deal worth more than $500 million. The layoffs are not related to that deal, Arena said.

Angie's List had 1,567 employees as of a Jan. 31 Securities and Exchange Commission filing. Arena declined to update that number or specify how many people work in sales.

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Angie's List has dramatically changed its business model during the past year. The company in July began offering free memberships, which increased its number of users, but caused its base of paying customers to plunge.

The company's year-over-year revenue declined by more than $10 million in the first quarter as paying subscribers became free members. Angie's List generated $73.1 million in the three months ending March 31, down from $83.9 million a year earlier.

Yet, during the same period, memberships grew at a rate 357 percent faster than the previous year. Angie's List during the first quarter added 860,000 members for a total of 5.7 million.

Arena described Thursday's layoffs as part of Angie's List's ongoing transformation.

"In general, we're always focused on efficiencies," she said. "What we had done, more than sales reductions, is some structural changes within the organization, so we're focused on optimizing both the acquisition of service providers and retention of service providers. This is more of a right-sizing."

Call IndyStar reporter James Briggs at (317) 444-6307. Follow him on Twitter: @JamesEBriggs.