May 10, 2001, 2:08 PM — Atlanta-based Web consulting firm iXL announced today that it plans to lay off about 300 workers, mostly from general Web-building positions. In the same announcement, the company noted that the layoffs come just after the company had hired 175 people in "client service and delivery" roles.
Two weeks ago, the company said it had experienced a pro forma net loss of $25.3 million for the quarter ended March 31.
"It's actually common to hire people and lay off people at the same time," said Tom Rodenhauser, an analyst at Consulting Information Services in Keene, N.H. "They are cutting the people who are not sellable."
Rodenhauser said iXL is building up its sales force and cutting people who build the actual product in the field. He said such a move is typical of companies in the consulting space. He said it appeared that iXL is laying off employees to make its numbers.
This represents the latest round of layoffs at the embattled consultancy. In November, iXL announced that it was cutting 850 workers, or 35% of its workforce, and closing offices around the world. That followed a September reduction of 350 jobs and represents a trend that has hit other consultancies.
"This whole segment has just been trashed," Rodenhauser said.
Although consultancies often reinvent themselves and come back as something different, Rodenhauser said that might be tough for iXL.
"IXL, because of its rapid rise and rapid decline -- well, it's going to be tough for them to come back in a big way," he said. "There is nothing worse than when a consulting firm goes through a series of wrenching changes, because it calls into question their ability to deliver on what they sell and it shows that they are having difficulty in managing their own business."
In its statement, iXL said it expects the layoffs to be short term and added that it will continue "to recruit and hire aggressively for professionals in industry-specific client management, customer relationship management and supply chain consulting services."
"We are a significantly different company than we were just three months ago," iXL President and CEO Christopher M. Formant said.