Computer World –
More dot-com companies in a variety of areas, including sports and communications, have announced layoffs this week.
Chicago-based MVP.com, an online sporting goods retailer, said yesterday that it was cutting 79 employees to save cash. Most of the layoffs will happen in Austin, Texas, and Boulder, Colo., where MVP acquired e-commerce businesses this year in its effort to expand its line of merchandise.
MVP spokeswoman Paula Davis said, "It's obviously a very challenging business environment, and we needed to make changes to adapt."
Many online retailers, facing increased pressure from brick-and-mortar stores and unhappy investors, have had to cut back operations to stay competitive.
MVP.com, whose investors include sports celebrities John Elway, Wayne Gretzky and Michael Jordan, was launched in January. The company has been seeking additional cash for its business, and MVP executives said they had hoped to land additional investors by the end of the year.
Like many other Internet retailers, MVP has had a tough time translating the initial burst of publicity that surrounded its launch into long-term success. The first signs of distress were evident in October, when MVP missed a $5 million payment to CBS SportsLine.com, which operated MVP's e-commerce business. In November, SportsLine, an Internet sports media company, terminated its $120 million, 10-year agreement with MVP.
On the communications front, Red Herring Communications, publisher of Red Herring magazine and RedHerring.com, said yesterday that it will lay off 32 employees, or 10% of its staff, as part of a plan to outsource its struggling Internet operations. The layoffs were mostly in the company's technology and engineering divisions in Cupertino, Calif., although a few people in the editorial department are also being laid off, the company said in a statement.
This is the second round of layoffs in two months for the San Francisco-based media company. In October, the company laid off approximately 25 employees when it combined its online and print editorial departments.
As part of its plan to cut costs and become profitable, the company said it will outsource its technology and hosting operations to an application service provider [ASP] and launch a new version of RedHerring.com in the first quarter of 2001.
"Our core competencies are serving our audience with strong and relevant content and providing our advertisers with the best possible advertising and marketing solutions," Red Herring CEO Hilary A. Schneider said in the statement. "Over the last year, ASPs in the publishing and media industry have become much more specialized and sophisticated, and we feel that we now can leave the technology to the experts and focus on what we do best -- content."
Also yesterday, Omaha-based InfoUSA, a provider of consumer and business marketing databases, said it cut 325 jobs and scaled back its Internet operations, including 63 cuts in the company's majority-owned Internet subsidiary, InfoUSA.com.
In a statement, Vin Gupta, InfoUSA's chairman and CEO, said, "In view of the weakening economy and the likelihood of recession, we will be managing our business to maximize our high cash flow. By more closely matching revenues and expenses, the company expects to improve profitability in 2001, thus improving shareholder value."