InsWeb Corp. has become the latest Internet firm to announce a restructuring.
late Sunday announced it would cut up to 40 percent of its full-time staffers over the next six months. The company said the move would increase revenues and operating efficiencies while giving it the ability to expand its insurance operations.
The company also warned the restructuring will significantly lower revenues for the remainder of fiscal year 2000. InsWeb did not quantify the statement, although it did say second-quarter revenues will likely come in at about $5 million. InsWeb will also take an unspecified one-time charge to cover the costs of the restructuring.
InsWeb plans to consolidate its corporate offices and operational centers and move them to the Sacramento, Calif., area later this year. The firm said most of the jobs lost would be related to that move.
As part of the plan, InsWeb promoted Chief Operating Officer Mark Guthrie to president. Guthrie will also continue serving as COO.
Hussein Enan, InsWeb’s chairman and chief executive officer, said he will work closely with Guthrie guide the firm toward profitability.
“These measures, combined with other cost-reduction efforts and our more than $75 million in cash and short-term investments as of March 31, make us confident that we will have more than enough cash to allow us to operate comfortably through 2002, at which point we expect to begin generating profits,” Enan said.
A key component of the company’s future plans involves expanding its insurance agency offerings in an effort to lessen InsWeb’s dependence on referrals for a large chunk of its revenue.
“This will help us balance our sources of revenue, give us more control over our business and generate recurring revenues from policyholders. It will also enhance user satisfaction by increasing the number of carriers from which consumers can choose,” Enan said.
Officials plan to elaborate on the moves in a press conference set for 2 p.m. Eastern.
InsWeb allows consumers to obtain quotes for a variety of insurance types from multiple insurers.