drkoop.com Cuts Workforce By One Third
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Aiming to cut operating costs by nearly half, drkoop.com Inc.'s new management team said Wednesday that it would reduce the company's workforce of full-time and part-time employees by about one third.
"We said from the beginning that we were going to run this company like a real business," said Ed Cespedes, newly appointed president of drkoop.com. "There are real people behind these layoffs and these were not easy decisions. However, we are ready to put the past behind us and move forward with our plans to rebuild this company and maximize shareholder value."
Cespedes, one of the hands guiding Prime Ventures LLC, stepped into his role at drkoop.com last week after Prime Ventures -- along with JF Shea Ventures, Cramer-Rosenthal-McGlynn Inc., and RMC Capital -- came through with $27.5 million in equity financing for the ailing healthcare network. Before the investment, drkoop announced it had run out of money and was largely believed to be dead in the water.
The layoffs are part of a company-wide restructuring intended to make the organization more efficient. The company has been renegotiating its portal agreements and is reducing its advertising expenses. In the second quarter, the company's cash expenses from operations were about $12.8 million, down $5.8 million from first quarter expenses of $18.6 million. The company wants to further reduce expenses to $6.5 million for the quarter ending Sept. 30, 2000.
laid off about 35 percent of its staff, reducing the company to about 120 full-time employees.