Kajeet outlines ‘sizable’ job cuts, will refocus on Internet sales

Kajeet Inc. last week slashed a “sizable” chunk of its sales force as it shifts from a brick-and-mortar retail strategy to an online model.
“We did restructure and let go a reasonable number of people,” CEO Daniel Neal confirmed, declining to disclose the number of dismissed employees. “We’re finding that we’ve had to adjust the skill set as we learn more; we’re having to tune the business.”
The tween-focused mobile virtual network operator will continue to distribute its wares through partners including Best Buy, Target and Toys R Us – for the time being, at least – but will no longer aggressively pursue physical retail sales. While the change in direction is presumably a cost-cutting move, Neal said it is an effort to leverage a medium that’s been surprisingly effective.
“What’s interesting and exciting is the huge degree to which we’re engaging people online. . The typical Generation X mom is Web-savvy; she needs concise, crisp information about what’s right for her kids,” Neal said. “She needs to know what’s out there and how things work.”
Kajeet targets young users – and their parents – with a pay-as-you-go service that includes kid-friendly features such as a GPS-enabled phone locator offering and content from Nickelodeon and The Cartoon Network. The company earlier this year raised $10 million in debt financing, adding to a $64 million bankroll of venture capital.
But kajeet is looking to survive an MVNO space that has proved treacherous. The last two years have seen a host of casualties including Amp’d Mobile Inc., Disney Mobile, and ESPN Mobile; a handful of others are struggling to remain afloat.
“Maybe it’s four-and-a-half-dollar gas,” Neal said, pondering the lack of traction at the brick-and-mortar level, “but as we built the business, what we’ve found is that our very best customers are very Web-savvy. We see huge potential (on the Internet) not just in terms of service but how we market and how we sell.”