RealTime IT News

Egghead.com Cuts More Staff

Following up on earlier job cuts, Menlo Park, Calif.-based Egghead.com Inc. slashed another 178 jobs or 29 percent of its remaining staff in a move that the CEO referred to as "right-sizing" the company.

The troubled Internet retailer of computers, software and other technology products, which at one-time was a chain of real-world stores, cut 77 jobs last month.

Its stock has been under $1 a share for some time and today was down almost 10 percent after the news came out, to 59 cents in mid-afternoon trading.

Egghead said today's across-the-board reduction in staff affects 21 workers in the company's Menlo Park offices and 157 full-time, temporary and contract workers from its Vancouver, Wash. facilities, including a number of senior and mid-level managers.

"Today's announcement reflects the company's ongoing commitment to right-sizing the business," said Jeff Sheahan, president and CEO of Egghead.com. "2001 is proving to be a challenging year for most technology-related businesses, and we are positioning ourselves to stay ahead of changing business conditions. Right-sizing is critical in today's market, especially as we continue our march toward reaching profitability this year."

Formerly a B2C company, Egghead now is focused on the Small- to Medium-sized Business (SMB) community.

"As we've gained experience with our B2B business model, we've developed a better understanding of what our outbound organization should look like and are adjusting the profile of that organization to better penetrate and service our Small- to Medium-size Business customer base," Sheahan said.

Egghead in March beefed up its senior management team -- adding a new chief financial officer as well as a senior VP for marketing. It also snagged a $20 million credit line from International Business Machines Corp. on March 7.