Minnetonka e-commerce company Digital River closing, laying off 122

Digital River, a Minnetonka-based e-commerce pioneer with a global client roster, is shuttering its headquarters and laying off 122 employees after more than 30 years in business.

The permanent layoffs, which include remote workers across the country, should start March 28, according to a WARN notice Digital River filed Monday with the Minnesota Department of Employment and Economic Development. The company is permanently closing its offices, the notice said.

In a Monday message to employees which the Minnesota Star Tribune obtained, owner and CEO Barry Kasoff described mounting financial pressures including “the rapid contraction of key customers, combined with the headwinds presented by new deals with shorter payment terms and U.S. trade policies that impacted one of our largest customers.”

“These challenges, coupled with rising operational costs and tax obligations, have impacted our ability to sustain operations,” Kasoff wrote.

Kasoff did not immediately respond to requests for comment.

Founded in 1994, Digital River built software online shoppers used to make purchases. The company went public in 1998 and survived the dot-com bubble burst of the early 2000s, operating offices in South America, Europe and Asia and boasting high-profile clients including Microsoft.

“Digital River is the reason you no longer buy a software box off the shelf at a retailer,” wrote former employee of 21 years Mike Penterman, whom the company laid off as part of a major workforce reduction this summer, on LinkedIn earlier this week. “They led the online e-commerce revolution.”

Founder Joel Ronning stepped down as CEO in 2012 after Digital River posted multiple quarters of losses. In 2015, New York investment firm Siris Capital Group bought the company for about $840 million and took it private.

Kasoff took the helm this summer. He is also president of Realization Services, a consulting firm that serves distressed businesses.

In his message to employees, Kasoff wrote Digital River has suspended services to most of its global customers and initiated insolvency proceedings for its German entities.

“Globally, we expect a substantial reduction in our workforce as part of the wind-down process, which will also impact our independent contractors,” he wrote. “While some employees may remain to assist with the transition, no specific decisions have been made at this time.”