RealTime IT News

Chinadotcom Axes 48 in China

In a sharp reminder that Internet scale-backs aren't just hitting the U.S., chinadotcom Corp. Friday laid off 48 of its staff from its portal division in China as part of a consolidation move.

One of the most successful Net firms in China, chinadotcom said 22 people were cut in Beijing, 16 in Shanghai and 10 in Guangzhou. Seventeen of the Hong Kong employees were from editorial, 10 from marketing, and 21 from administrative and support functions.

The cuts were made just two days after the firm took a 7 percent stake in online advertising network 24/7 Media Inc. under an agreement that expanded their existing business alliance.

In an interview with InternetNews.com Friday, Craig Celek, vice president of investor relations at the New York office, said the cuts represented an "attempt to achieve cost efficiencies in our China operation."

"We've scaled up, going from 238 in July 1999 to 2,136 today after the cuts," Celek said, adding that the lay-offs represented 2 percent of the division's workforce. "These were non-essential portal jobs. As with any growing business, you hire for what you think you're going to need, but sometimes that changes. It's our duty to let our shareholders know."

Celek also noted that the people were let go because they could not be absorbed either for their location or degree of skill.

"We needed to maintain our road to profitability," Celek said. "But we are expanding aggressively in our Web solutions division."

Celek was quick to note that chinadotcom was not the only firm in China commencing lay-offs.

Indeed not.

Online media network Hongkong.com, a unit of Chinadotcom, recently laid off about 40 out of its 200 employees while China-focused online media network Tom.com fired 80 of its 500 employees in July.

City Telecom (Hong Kong) Ltd. cut 200 jobs in its broadband access arm and two Internet publishing units of Next Media Ltd. also cut about 100 jobs in July.

chinadotcom features three major divisions -- Web solutions, portal solutions and online advertising services.

In the U.S., August saw the forfeiture of Living.com's home furniture business when it cut 275 employees last week and closed up shop. Two weeks ago, Kozmo.com postponed its initial public offering due to the instability of e-commerce firms in the market in addition to laying off 30 and 40 people, or about one percent of its total staff, from its headquarters office in New York City.

That was marginal compared to the 275 employees it whittled from its field service dispatch trunk in early August last week. In June, the company cut 24 jobs from its headquarters office.