RealTime IT News

Layoffs at Walker Digital Probed

Priceline.com Founder Jay Walker just can't seem to buy a break.

Priceline's advertising was called into question, it bailed out of the grocery business, it stock is near an all-time low, and now the Connecticut attorney general's office is investigating its founder for possible labor law violations following layoffs at a related company.

Priceline's stock was trading at $2.37 this morning, down more than 7 percent and near its 52-week low of $2.18. At one time it traded for more than $104.

Last week, Priceline.com, the name-your-own-price seller of airline tickets and services, said it may take a fourth-quarter charge because of money problems at Walker Digital Corp., a firm that developed the name-your-price software and shares some of the same ownership.

In fact, Walker Digital laid off about 100 of its 135 workers at its Stamford, CT, offices after failing to obtain more financing from investors. Jay Walker, Walker Digital chairman and chief executive, also is the founder and vice chairman of Norwalk, CT-based Priceline.com.

Connecticut Attorney General Richard Blumenthal, already investigating consumer complaints against Priceline.com, now has been quoted as saying there may have been labor law violations regarding the lack of advance notice given to Walker Digital workers about the layoffs.

Priceline.com itself contends that Walker Digital "has nothing to do with us."

Blumenthal was quoted by Bloomberg News as saying that the company may be liable for severance or back pay if proper notice was not given to the laid off employees.

Walker Digital had not been notified of the investigation, and the company believes it gave proper notification, spokesman Kevin Goldman told Bloomberg. The company paid severance to those who had worked for a year and had considered hardship cases, he said.

Priceline.com's filing with the SEC last week relating to the charge didn't indicate what the amount might be.

Priceline has never made any money and posted a third-quarter loss of $1.19 per share. For the first three quarters of this year, revenues totaled $1.01 billion, up from $313.2 million in the same period a year ago. Net loss applicable to common stock rose 58 percent to $224.4 million.