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kajeet layoff rumors fly, and we get the straight story

Last week, we caught wind — via a comment left here regarding some trimming of kajeet’s staff. Of course, this source wasn’t confirmed. The numbers actually seemed quite large — the commenter said that 40 percent of the staff had been canned. That’s quite large, even for a smaller operation like kajeet. A quick news search brought no confirmation on the matter. So we went to the horse’s mouth: CEO Daniel Neal. He was kind enough to address this issue.

Neal says that yes, it is true that they have laid off some staff — but the 40 percent figure is greatly exaggerated. More accurately, Neal says that it was about 19 percent of positions, bringing the company down to about 65 employees.

“You want to raise money when you have it, not when you need it,” said Neal. “When you’re a smart and well-managed company, you always have to keep your mind on how your cost structure is evolving. We are very careful with our cash.”

He did mention that many companies do this. Rather than waiting for needs to arise, they stick to their guns and keep things in order while times are good. This can help stave off problems down the road.

Rumors further speculated that kajeet’s CMO was part of the layoffs, but Neal says that is not the case. He left his position two or three weeks before these layoffs occurred, to pursue other interests. So he was not part of this at all.

As for kajeet, they’re still going strong. While their numbers aren’t publicly available, Neal said they had a very strong Christmas season, and saw a considerable increase in their number of subscribers. Makes sense. Plenty of kids want cell phones for Christmas, and kajeet is ripe for that market.

Thanks to Daniel Neal for speaking with us to clear the air on this topic. We’re glad to hear that kajeet is continuing to do well.

6 Responses

  1. Lisa Hughes Says

    I am furious with Kajeet. We bought this phone for our tween and fell for all the bells and whistles offered. The problem was that it was displayed under the prepaid section and when we bought it, the customer service rep told us it was just that…a prepaid phone. That to me means if you’re not talking, you’re not paying. Only after my daughter used 55 cents of a $30 card and ran out of minutes and consequently was left waiting for someone to come get her did we find out that Kajeet charges 35cents a day just to have their service. This is hardly a prepaid…that adds up to a monthly fee. A monthly fee that is actually higher than if we had added her to our existing TMobile plan. This information was not disclosed to us however the company states that it is disclosed on their website when you set up the phone. The obvious problem there is that at that point we have already puchased and destroyed the packaging of the phone. So a $50 phone and $34.50 in charges for about 5 calls? What a scam.


    Posted on March 26th, 2008 at 6:57 pm
  2. Leslie Adkins Says

    Lisa:

    I understand that you’re upset, but your “what a scam” comment compels me to reply. I’ve been working with kajeet for a long time, and a lot of that work has been on marketing communications. As such, I’ve been directly involved in how kajeet communicates the 35-cents-a-day access charge.

    It may not seem obvious, but every cell phone service provider charges a fee to pay for the cost of operating the network. At kajeet, we set out to build a cell phone service to meet the needs of kids and parents and we incorporated many unique features into our service as a result. In our case, the daily access fee allows kajeet customers:

    —unlimited use of our Web-based management tools so that kids and parents can decide when the phone can and can’t be used (such as no calling and texting during school

    —the ability to determine who can or cannot call and text the kajeet phone (and thereby the ability to get the calls you want and block the calls you don’t want)

    —the ability to set a phone allowance for the kid so that parents can easily manage the budget while kids gain financial responsibility over their calling, texting and downloading

    —the ability to turn features on and off so that you can tailor the service to match your family’s needs

    —unlimited access to the kajeet navigator with loads of kid-friendly games, ringtones and other appropriate content for kids to personalize the phone to reflect their own unique personalities

    As we were building kajeet, we also debated how to charge for our unique service for kids and their families: Should it be a monthly fee? A daily fee? Or do we charge no fee and instead charge higher rates for talk and text? In the end, we chose a $.35 daily access fee that adds up to approximately 10 bucks a month. That’s about what it costs to add a line to most family plans, and is less than the fees for many pay-as-you-go services.

    From the start, it’s been a mandate at kajeet to communicate rates clearly, in plain English, and without any baffling buzzwords. There’s always room for improvement, of course, but I believe that’s happening at every step of kajeet communications from the brochures in Best Buy and Target to the packaging to the Web site and more.

    As for customer service, I’ve been to the kajeet call center and met the representatives there. These are people who are passionate about the company and genuinely care about creating satisfied customers.

    Finally, I’d like to note that kajeet is lowering the daily access charge from 35 cents a day to 32 cents a day effective April 18.

    The bottom line is that kajeet is a company that’s predicated on the notions that success grows out of clear communications and satisfied customers, NOT on the all-too-common themes of “confuse the public” and “drain everyone’s wallets.” We believe that our pricing (and the way we convey that pricing to our customers) is fair, sensible and provides a great value for the level of service that we offer to kids and families.


    Posted on April 3rd, 2008 at 11:33 am
  3. Jeremiah Khampadith Says

    I hate Kajeet. People should be charged depending on what they use. If the child doesn’t use the internet browser, DON’T CHARGE THEM! I agree with the angry mom under all circumstances.

    I WILL get my phone flashed to something more affordable and convenient.


    Posted on August 18th, 2008 at 10:47 pm
  4. kathy Says

    The 32 cents per day fee is well worth it for the web-based parental management ability on these phones, not to mention there are no long term contracts. Some of the themes and other options make it more fun than my own phone.


    Posted on November 23rd, 2008 at 9:23 pm
  5. Dr. Philip Kousoubris Says

    Well, the new website design around 2months ago is less cluttered, sort of, but when I tried to use my PAID GPS locator service, the option is ghosted. There is no way to turn it on, but adding ANOTHER GPS locator service is oddly available. This stinks. I used the gps locator to confirm my daughter’s location at the bus stop while at work. Tried calling the 1-866 kajeet cust. svc. number. The EASTER ‘we’re off for good friday’ message is STILL playing, and then it hangs up. Um, Kajeet folks? Are you asleep at the wheel? Looks like its time to stop by my friendly T-mobile store and STOP kajeet service!!!


    Posted on April 7th, 2010 at 5:47 pm
  6. zumpie Says

    “The bottom line is that kajeet is a company that’s predicated on the notions that success grows out of clear communications and satisfied customers, NOT on the all-too-common themes of “confuse the public” and “drain everyone’s wallets.” We believe that our pricing (and the way we convey that pricing to our customers) is fair, sensible and provides a great value for the level of service that we offer to kids and families”

    REALLY, Lisa???? Because I’ve never encountered a company with so much double billing (and I’m on a plan), confusing websites and poor customer service in my life! Glad to see I’m not alone. Unless they refund my money pronto, I’ll be taking legal action!


    Posted on July 24th, 2010 at 12:37 pm

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