December 29, 2000, 2:04 PM — In a move to cut costs, pioneering online magazine Salon.com (SALN) announced Wednesday that it has eliminated 25 jobs, or 20 percent of its staff.
The layoffs are the second round this year for Salon, which fired 13 workers and closed its Seattle office in June. "The market is demanding profitability," Salon CEO Michael O'Donnell said in a statement. "We're committed to get there as quickly as possible in 2001."
Job cuts were made across the board, including members of the editorial, art, administration, marketing, sales and tech departments, according to Salon spokeswoman Dayna Macy. O'Donnell says that only five editorial posts were affected, and that as a result the site would produce less content than previously. "We've been putting up around 50 stories a day, so maybe we'll put up 40 stories a day now," he said.
In addition to the layoffs, the company announced the resignation of co-founder and EVP Andrew Ross, citing his desire to spend more time with his family. Steve Reed, who had just joined Salon in June as senior VP of sales, also resigned.
Salon has won numerous awards for its top-rate journalism. But like countless content sites, Salon's stock has taken a beating since April's dive. Salon shares closed Wednesday at $1.06, just 9 cents above their 52-week low.
In an effort to boost revenues, the site increasingly has turned to syndicating its content to newspapers and other Web sites. O'Donnell says the company is exploring numerous alternative revenue streams, such as subscription-based newsletters that would focus on narrow topics like Washington politics or the Linux software movement. He added that the existing Salon.com site would remain free.
Salon currently relies on advertising for about 85 percent of its revenue. With around $6 million in cash left over from last year's IPO, O'Donnell says he expects the site to turn a profit by the second quarter of 2001.
"We still believe [online content] will be a big industry," O'Donnell told The Standard after the layoffs in June. "But things are taking longer to develop than we thought."