RealTime IT News

Breakaway Cuts Workers, Offices

To try and turn a profit, Breakaway Solutions, will close two offices, lay off 200 workers and move its headquarters from Maynard, Mass., to Philadelphia, closer to its institutional investors.

The Internet consultancy will shut its Denver and London offices and convert a Ft. Lauderdale, Fla., development center into a regional sales office.

"The company is committed to profitability and continues to make critical administrative cost-cutting measures," Breakaway said in a statement.

The changes are the latest in a tumultuous 2001. Two months ago, it laid off 108 employees and moved its headquarters from the pricey Boston waterfront to Maynard, 30 minutes west of the city. And last month, chairman and CEO Gordon Brooks stepped down.

In more positive news, the company's shareholders approved a $33 million financing package from SCP Private Equity Partners and Internet Capital Group . On a common stock equivalent basis, the investments will be made a 70 cents per share. The money will be used for operating expenses.

"Breakaway Solutions has what it takes to make the necessary company transformations to emerge as one of the leaders in this sector," said Wayne Weisman, a partner a SCP and Breakaway's chairman.

Like other consultancies, including local players Viant and Zefer, Breakaway expanded quickly thanks to a flood of business from venture-backed dot-com clients. But when those companies began folding last year, Breakaway was unable to shift its focus to larger, more established companies fast enough.

On Thursday, shares of BWAY closed up 0.02, or 6 percent, to 0.36. In the last 52 weeks, the issue has ranged from 0.25 to 64.5.