Ecomom cuts the majority of its staff, as Vegas tech community continues to reel from Jody Sherman's death

By Sarah Lacy , written on February 1, 2013

From The News Desk

In all the press about the death of entrepreneur Jody Sherman, few people have focused on what happens to his company, Ecomom.

Part of that is because it seems banal and tacky in the context of a shocking and unexpected loss of a human life. But part of that is because initial reports to investors and the press said that Ecomom would continue under the guidance of Sherman's co-founders and existing team. Considering the company had raised a fresh round of capital mid-2011 and was lauded as one of the stronger companies in the Vegas tech scene, there was no reason to doubt that.

But the company and the Vegas tech scene got another blow yesterday, when word got out that most of the Ecomom's staff would be immediately laid off, just two days after the crushing news about the death of the man whom many of them uprooted their lives to come work for. The Vegas Tech Fund is actively working to find other homes for them among the community's other startups, and I'm told the local press spent the day trolling The Beat -- the Creamery of the Vegas tech scene -- looking for disgruntled ex-workers to comment. Classy.

In all, 19 people were laid off out of 28 total. At the Vegas headquarters, only four were kept, and they are reportedly taking pay cuts and moving to smaller offices, according to a local media report. The report further stated that the company would have had to close within three weeks had these moves not been made. (Our own sources in Vegas have backed these reports up.)

I spoke with one investor in Ecomom who was almost as shocked to hear this as he'd been to hear of Sherman's death. According to this person, the only communication he received was that the co-founders would be stepping in to further the company's vision -- not that more money was needed to keep the doors open, that such severe layoffs were this imminent, or that the company was even in trouble. Like a lot of investors no doubt, he was holding those questions until after the memorial service out of respect for the team.

Life in a startup is always hard, but our hearts go out to Ecomom's team as an unthinkable week continues to just get worse for them.