Loudeye to Cut Jobs Following Q4 Revenue Release
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Amid an announcement that Q4 revenue will be below consensus estimates, Loudeye Technologies revealed that they would have to reduce staff by 50 people, approximately 18% of its workforce.
After the reduction, the company will have approximately 240 permanent employees. According to company executives, these actions are expected to result in cost savings totaling approximately $3 million on an annualized basis.
"Although we believe that opportunities for our digital media solutions remain attractive over the long term, our industry as a whole continues to work through early market challenges around copyright, business model and funding concerns," said Dave Bullis, president and CEO. "As such, we are announcing steps to focus our solutions and lower our cost structure to support the markets which have the most traction in these early stages."
The company anticipates fourth quarter 2000 revenue of approximately $3.9 million, slightly below consensus estimates.
According to company executives, this sequential decline is due to a substantial slowdown in the overall market for digital media infrastructure solutions, with the greatest impact being felt from the company's new media customer base.
"We are fortunate to have a strong position in technology and the capital resources to continue to develop our digital media services and applications and take advantage of potential consolidation that may occur in this market," said Bullis. "In the near term we see the largest opportunity in servicing the demand for digital music on the web and we intend to increase our efforts in this segment of the business."
Loudeye will continue to fully support its Vidipax media restoration subsidiary in New York, in addition to its audio digital media services capabilities, Loudeye Media Syndicator application, Loudeye Media Subscription Services offering, digital media archive system and the development of new products to support its digital music strategy.