Thrunet to Spin Off Portal, Pare Down Workforce
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[February 5] Broadband Internet service provider (ISP) Thrunet plans to spin off its portal service unit in the first half of this year and cut about 17 percent of its workforce in an effort to raise its profitability.
Unveiling its business plan for 2001, the company also said it aims to earn 117 billion won (US$92.9 million) in profits and 500 billion won (US$396.8 million) in sales.
Target sales, double last year's turnover, are broken down into 380 billion won (US$301 million) from its ISP business, 110 billion won (US$87.3 million) from networking and 19 billion won in fee-based portal service.
The company will spin off Korea.com, a portal service launched in September, 2000, as a separate entity in the first half, but will remain its largest shareholder.
By charging for use of its premium contents, Korea.com raked in 3 billion won (US$2.4 million) in sales last year and 600 million won (US$476,000) in January, according to the company. Thrunet will seek foreign investment in the portal service to increase marketing and service quality and will seek alliance with global e-business players to introduce e-commerce service to Korea.com.
In a massive restructuring effort, Thrunet also decided to reduce its staff by 17 percent from 740 to 580, including five out of its 16 directors.
The company appointed Kim Hong-sun, former Softbank Korea president, as its new chief executive officer. It also named three new outside directors from Softbank, which became Thrunet's largest shareholder with a 16.5 percent stake by buying $100 million worth of new common stocks and bonds with warrant (BW) Friday.