RealTime IT News

Open Market Cuts Staff, Restructures As Losses Widen

E-Commerce company and software provider Open Market Inc. is laying off 20 percent of its staff in an effort to recover from dismal third quarter results.

A company spokeswoman confirmed Friday that approximately 100 of the company's 480-person staff will lose their jobs in the realignment.

Open Market on Friday posted a third-quarter loss of $6.6 million, or 19 cents a share, compared to a net loss of $6.4 million, or 20 cents a share, a year ago. The loss was in line with analysts' expectations. Revenues were $14.4 million, down from $15.7 million in the quarter last year.

For the first nine months, Open Market has lost $28.5 million or 87 cents a share compared to a loss of $55 million or $1.79 in 1997.

Gary Eichhorn, the company's president and chief executive officer, expects the company to a restructuring charge of between $2 million and $4 million in the fourth quarter as the company works to get back on track.

"We were disappointed in our financial results this quarter, which fell well short of external expectations for both revenue and net loss per share. From our perspective, the revenue shortfall was attributable to several areas including the corporate market for CD-ROM based software sales, publisher royalties, Asia/Pacific Rim and Japan and merchant revenue. In addition, we experienced some execution issues in the sales organization.

Eichorn said there were several bright spots in the third quarter, including significant new customer growth and the introduction of the Folio 4.2 suite and the Japanese version of Transact. The company won several new Transact customers, including America Online Inc., Deutsche Post AG, Playboy Online and The Bureau of National Affairs Inc.