Priceline.com Cuts Back

Much troubled Priceline.com said it has slashed about 11
percent of its workforce and “re-focused resources on its core businesses.”


The company said it will continue with its name-your-own-price service for
airline tickets, hotel rooms, rental cars, home finance, long distance and
new cars, but will indefinitely postpone the introduction of its
business-to-business, term life and cell phone services and put a halt to
efforts to expand into Japan.


Priceline, which has never made a profit, also said it would take an
unspecified restructuring charges in the fourth quarter. The jobs cuts affect
“approximately 48 positions … in connection with the postponements and
ongoing efficiency measures,” the company said.


The announcement was made after the bell yesterday, when the company’s stock
closed at $1.87, down from its 52-week high of over $104. The stock was up to
$2.12 shortly after the market opened this morning as investors reacted
positively to the news.


Priceline.com and Softbank E-commerce Corp., a subsidiary of Softbank Corp.,
said they have discontinued discussions to introduce Priceline.com’s
buyer-driven e-commerce platform to Japan. The two companies entered into a
non-binding letter of intent in July and a formation agreement in September
to form a new company, but said that definitive agreements could not be
reached and so the talks were discontinued.


As far as the postponements go, the company said that they will “relieve the
company of … significant financial and operational burdens…”


The measures are part of a broader program to strengthen Priceline.com’s
travel business through new marketing programs, improving business processes,
enhancing its Web site and improving customer service, the company said.


“Priceline.com remains committed to building a profitable business with high
customer satisfaction and long-term growth potential,” said Priceline.com
President and CEO Daniel H. Schulman.


Priceline’s troubles began early in the fall when its advertising was called
into question and consumer complaints resulted in a state
investigation.
The company later
bailed out of the grocery business
as its stock began to go into free
fall.

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