The so called AOL place in Norton must have went belly up.
A company that set up shop in the former Hotel Norton last year to support America Online's interactive Yellow Pages business has apparently laid off its local workforce.
Fred Ramey, Norton's assistant city manager, confirmed Monday he has been told Richmond-based Virtus Marketing laid off about 40 people here.
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According to a former Virtus employee, the layoffs took place on Monday, Oct. 3.
Ramey said Virtus officials notified him during the weekend before last that the company would be letting go all of its Norton employees. The status of its Richmond operations are unknown.
Company officials explained that Virtus was owed some payments from AOL, and that AOL had previously decided to shift part of the business in its Virtus contract to another firm, according to Ramey.
Later, Virtus was able to pick up business from other clients, but it wasn't enough to compensate for the lost AOL revenue, Ramey was told.
Former Virtus employee Barbie Ryan of Big Stone Gap said Friday that employees didn't get paid one week earlier, and were told paychecks were delayed while the company was making changes to its payroll system.
On the morning of Oct. 3, the phones went dead, Ryan said. Later, she explained, employees were told to take a 15-minute break, come back for a meeting and "put your game face on."
Virtus President Richard Sloop and another company official presided over the meeting, Ryan said. Employees were told to collect their things, leave and come back at 2 p.m. to be interviewed for a possible job with a new "client," she said. A few people were hired, according to Ryan.
Virtus told Ramey it is working on getting employees paid for work already done, he said. However, he said, he doesn't know at this time whether Virtus will continue to have a presence in Norton.
NEW EMPLOYER
Ramey said Virtus officials told him the company had been working with a new potential client called Leads.com. Instead of becoming a Virtus client, he said, Leads.com apparently hired 14 or 15 of the laid-off Virtus employees to work for it directly.
Leads.com helps companies gain a presence on major Web search engines such as Yahoo and Google, along with the online Yellow Pages directory, according to its Web site. Leads.com also offers Web site and online advertising design services.
Leads.com was acquired in May by Florida-based Websitepros.com, which in late April announced it was preparing its first public offering of common stock in the company, according to its Web site.
CITY RESPONSE
The Norton Industrial Development Authority spent about $240,000 to prepare the unfinished third and fourth floors of the former hotel for Virtus. The company has a lease through November 2007, at nearly $7,100 per month, Ramey said.
Lease payments are owed for September and October, he said. Ramey said discussions continue on getting the payments made. His understanding is that Virtus may enter a sublease agreement with Leads.com, occupying the third floor.
Also, Virtus had deposited more than $20,000 with NIDA that can be drawn down if the company breaks the lease or fails to catch up on its lease payments, according to Ramey.
Meanwhile, Ramey said he's working with an entity that has expressed interest in occupying the fourth floor.
NIDA's investment to "build out" the third and fourth floors essentially created open spaces ready for a business tenant to move in, with telecommunications and power connections that allow for a variety of office and cubicle configurations, Ramey said.
Later Monday, Virtus chief operating officer Adrienne Mengani left a voice mail message with The Coalfield Progress offering to discuss the situation. However, Mengani could not be reached afterward for comment.
BACKGROUND
Plans by Virtus to set up shop in Norton were announced with great fanfare in March 2004.
In fact, Ted Leonsis, vice chairman of America Online and president of AOL Core Service, was on hand to discuss plans for Virtus to manage sales and customer service for AOL's Yellow Pages operation on the hotel's third floor. The move would create 67 jobs in Norton and 40 jobs near Richmond, officials said. Starting pay for customer service representatives would be $9 per hour.
The company planned to invest $500,000 in the Norton operation.
In January of this year, Virtus announced it would invest another $100,000 to expand in Norton, creating 35 more jobs and occupying another floor of the former hotel.
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