This morning, Zirtual sent out two emails stating that they will immediately pause service. Without warning, this leaves their clients with many questions and very few answers, and employees wondering if they will still have a job. At this time their site is redirecting to a single blog post reaffirming that they have paused operations; they also deleted their Twitter account. The company is claiming that they are not shutting down, but pausing operations citing financial issues as the reason.
In an email (full email below) attributed to Maren Donovan, Erik, Collin + the Zirtual Team, they stated, “It is with an incredibly heavy heart that I have to send this message. As of today, August 10th 2015, Zirtual is pausing all operations. Due to a combination of market circumstances and financial constraints we must re-organize our current structure if we are to successfully serve you in the future.”
Employees received an email just as alarming, noting that there is no specific date for when they can resume working, if at all.
“Effective immediately, Zirtual will cease all operations. This also means that our last day of employment was Friday, August 7th, 2015,” stated Donovan. “I wish this wasn’t true. We’ve been doing everything in our power, day and night, to produce a different outcome. Sadly, with tears in our eyes, we have to say that we’ve exhausted our last efforts to save the company from this harsh reality.”
Although Donovan stated that the team is doing everything within their power, on Friday she sat down for a casual interview for This Week in Startups. During the interview, she discussed how when the service first launched, the model was flawed by allowing people to pay a monthly fee for unlimited virtual support. After moving away from that approach, their team weighed the pros and cons of keeping their initial customers on the plan through a grandfathered program. There were no specific mentions of the company being at risk during the interview.
According to an employee, there were also talks increasing wages. “Leading up to this everything seemed fine. No issues, at least none that I noticed. The CEO, Maren, had even brought up raising wages across the board a month or so ago. It seemed like everything was going perfect,” said Dylan (last name withheld). “As for my feelings – Well, it sucks. I wish there would have been more notice. Employees received an email at 4:30am about it and that was it.”
Donovan also dished on success tips for managing a chaos during a company shakeup. Perhaps it’s foreshadowing, but someone isn’t taking their own advice. In her July article on Fortune, Donovan said:
“Don’t make change a secret: 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.”
A Silver Lining for Employees
Secrets and abrupt halts aside, employees are doing what they can to continue working. We spoke with the founder of the Law Studio of Nance L. Schick in New York about her experience using Zirtual, and how she was faring. Prior to this morning, she was having a great experience. According to Schick, employees and clients are currently connecting with one another outside of the network.
“We’ve been seeing a lot of leadership come from the employees,” said Schick. “People are working out a system to continue to work with clients.” Many are using Twitter with the hashtag #zirtual to find one another, and some employees are helping Zirtual clients find their assistants. Some employees are also forming Facebook groups to stay in touch.
Prior to the pause in operations, Schick was in talks with her virtual assistant to increase his hours, but as a result will now be adding him to their payroll directly. “It turned out to be a win. Zirtual gave them great training. I’m just disappointed with how they are handling this,” said Schick.
For Schick and the other clients who are now offering their assistants a job directly, there is one very important question: do past agreements stand? As part of using the service, clients and assistants agree to work directly through the system, pay through it, and use it to communicate. Schick is concerned that by bringing her assistant on to her payroll that it may break this agreement, which could pose a legal issue for everyone involved later on.
Competing services are also taking this as an opportunity to onboard new virtual assistants and help provide service to clients who are left in a lurch. X.ai is a virtual artificial intelligence based assistant, and have offered their service free of charge to the first 1,000 Zirtual clients in exchange for a tweet. Others are offering a quick transition by forwarding your paid bill to them.
Pause, Closure, or Something More?
In an email to Tech.co founder Jen Consalvo from Donovan, she further supported their stance on this being temporary, not a full closure for Zirtual.
“So we are currently in the process of a transition that will be helpful for our clients + ZAs, we're in the midst of talks now but unfortunately I can't say anymore until it's final—We will have more details to share soon.”
Requests to current investors which include VegasTechFund have been returned with a decline to comment; however, Jason Calacanis posted on Twitter that he was only informed of the issue on Saturday.
1/sorry to hear about @Zirtual shutdown today, as a fan of the service & as an investor. I don't speak for the company & have limited 411.
— jason (@Jason) August 10, 2015
3/wouldn't have suggested being on the show Friday if I knew they were shutting down Monday; confused at a $11m a year business imploding.
— jason (@Jason) August 10, 2015
This story is currently developing, and we will continue to update you as more details are made available. Until there is information stating otherwise, Zirtual is not dissolving, but in a transitionary period. However, even if they do resume operations, will clients and employees choose to return? Dylan said they would, due to their fair pay and great culture, but would need a guarantee this wouldn't happen in the future.
Zirtual raised an additional $650K on July 21 for debt financing. In total, the company raised more than $5.5M over four rounds since their founding in 2011.
Email to Zirtual Clients
Dear Zirtual Clients,
It is with an incredibly heavy heart that I have to send this message. As of today, August 10th 2015, Zirtual is pausing all operations.
Due to a combination of market circumstances and financial constraints we must re-organize our current structure if we are to successfully serve you in the future.
I realize this news comes incredibly fast and I am truly sorry for the Z-shaped hole this will leave in your lives and business.
We know that many of you care deeply about your Zirtual Assistants. If you would like to connect with your assistant independently, please reach out to:firstname.lastname@example.org.
Thank you from the very bottom of my heart for the support you’ve shown Zirtual and my deepest apologies for the speed and inconvenience of this announcement. We will communicate any further updates as soon as we have them.
Maren, Erik, Collin + the Zirtual Team
Email to Zirtual Employees
In 2011, Zirtual was created with a vision to impact the future of work. We imagined a world where good help was not hard to find—and we have been trying to create that world for the last four years, in the process building a community and culture that connected us all in ways beyond the founders’ dreams. This has been more than that: a family, a team, and we came together to accomplish some amazing things.
Unfortunately, we have some truly heart breaking news today, news I never, ever thought I’d have to say. This is the hardest thing we’ve ever had to do, and we’ve been fighting and crying, trying to make it not so. However, due to a myriad of reasons, Zirtual can no longer afford to operate.
Effective immediately, Zirtual will cease all operations. This also means that our last day of employment was Friday, August 7th, 2015.
I wish this wasn’t true. We’ve been doing everything in our power, day and night, to produce a different outcome. Sadly, with tears in our eyes, we have to say that we’ve exhausted our last efforts to save the company from this harsh reality.
We have had so many incredibly talented and amazing people who believed in what we were doing, and were willing to put their whole selves behind this mission. We’ve made friends and connections that will last a lifetime, and so did so many of you. For that, we are forever grateful and thankful—I have so much love for you all.
We know that there are going to be a lot of emotions and many questions. We have prepared a FAQ with as much information as we have at this time. There is still information that we are figuring out and will know more over the next week.
Q: What is happening?
A: Zirtual is shutting down all operations.
Q: When is this happening?
A: Effective immediately.
Q: Why is this happening?
A: Due to financial reasons, we have to cease operations immediately.
Q: I really like my job and want to explore working independently with my clients. How can I go about doing that?
A: We encourage you to do so! Clients have also been notified of Zirtual’s closure and we encourage you and/or them to connect independently to discuss future working opportunities.
Q: What will happen to my Zirtual account? When will I no longer have access to it?
A: You will no longer have access to your Zirtual account effective immediately.
Q: What is going to happen to sensitive information that was stored?
A: We will be purging this information from our systems entirely within the coming days.
Q: I don’t know what to do. Who can I talk to about this?
A: Feel free to contact your pod leader outside of Zirtual, or email me directly at email@example.com there is also an EAP line (hotline)
Magellan Employee Assistance:
You are allotted 3 visits with a counselor for up to 90 days
Q: I have a question that is not answered here, where should I send it?
A: Please direct all questions to firstname.lastname@example.org,
With heavy hearts, and more love than you can begin to possibly imagine, we goodbye for now, hopefully not forever. We love you.
– Maren, Erik, Collin, and Joe
Maren Kate Donovan