Mediaplex to Cut 40 Jobs, Lowers Q4 Earnings Guidance
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San Francisco-based online ad technology firm Mediaplex said Thursday that it will cut more than a quarter of its workforce in an effort to reduce operating expenses.
The firm said its move to eliminate 28 percent of the company's positions, about 40 staffers, will also allow to Mediaplex streamline operations, in part by eliminating redundancies.
The layoffs, which are effective immediately, involve employees in Mediaplex's New York, San Francisco and San Jose offices, as well as in its Louisville-based subsidiary.
Mediaplex also gave lowered guidance for fourth quarter. In October, the company had said it expected fourth quarter's per-share losses to repeat a $0.15 third-quarter loss, before non-cash charges. Wall Street had largely upheld that guidance, estimating a loss of $0.16 per share for the fourth quarter.
Now, executives said that while the company anticipates revenues being on par with previous guidance of $15 million to $16 million, one-time charges associated with Thursday's restructuring and severance will weigh down earnings by an unspecified amount.
Mediaplex did say that it expects the job cuts to reduce expenses by about $10 million during 2001, and reiterated its plan to make profitability by fourth quarter of next year.
"Mediaplex is fully committed to increasing shareholder value. The restructuring of the company demonstrates our dedication by driving down expenses," said Mediaplex chairman and chief executive officer Gregory Raifman. "To our stakeholders -- our employees, clients, and vendors who have supported, and continue to support Mediaplex during these changing times -- we are committed to developing new, proprietary digital messaging technology and to providing high-quality customer service as we continue build a stronger company for the future."
Mediaplex's MOJO technology allows companies to customize, database-link and target banner ad, e-mail marketing and Web site offers. AdWare, which Mediaplex acquired from McCann-Erickson in July, is an ASP that provides software to manage media planning and buying and ad insertion.
Despite a flagging valuation similar to others in the industry -- thanks to investor malaise and questions about the value of online advertising -- the company is in fairly good financial health, at least at the time of its third-quarter filings. In regulatory filings at that time, Mediaplex reported that it had about $65 million in cash and marketable securities.
At press time, shares of MPLX were trading 18 percent down at $1.44, well off its 52-week high of $105.13.