Human Resources

Dot.com problems continue

January 13 2001 - LookSmart, an Internet directory service, announced a cut of 172 employees (31% of its workforce) in an attempt to attain profitability. The cuts are focused on its online advertising interests as the company restructures to focus on its listing and directory business.

On January 11, The Wall Street Journal reported that CNN News Group, part of Time Warner Inc, will announce major job cuts because of reorganization of the unit's TV and Internet operations.

CNN's 4000 employees had learned of big changes through an internal memo in December and the fate of between 500 and 1000 staff may be learned next week. With a merger of Time Warner and AOL awaiting approval, cuts are likely to hit Interactive operations hard.

These developments follow a long series of job losses in the dot.com sector as overblown Internet ventures struggle in a slowing US economy. Last week Vault.com, an Internet career site, announced reductions of a third of its 99 employees in order to achieve profitability by the end of third quarter. Recent funding of $10 million from investors such as New York City Investment Fund and Hollinger Capital would keep it going until then.

Around the same time, Los Angeles based eToys, an Internet toy retailer, said that it intends to cut 70 per cent of its 1000 employees. e for the company. The company sent "job elimination notices" to around 700 eToys and BabyCenter workers with 380 going immediately and a further 320 leaving by March 31. The UK Web site would close in January and the European business wound down.

A study by San Francisco-based Webmergers.com shows that at least 210 web-based businesses closed in the year 2000, with around $1.5 billion in investment money going with them. Closures accelerated towards the end of the year - 60 per cent in the fourth quarter, including Pets.com, BizBuyer.com and DeskTop.com. 109 companies were e-commerce businesses, 30 were online content sites, with online services and infrastructure being the remainder.

15000 employees lost jobs in these closures, with an unspecified number of other workers going as companies still in business cut their payroll numbers. Silicon Valley was hit especially hard with 2300 job layoffs at more than 20 companies.

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