RealNetworks Reorganizes, Trims 90

RealNetworks restructured and let go of 90 of its staffers Wednesday afternoon, a 10 percent reduction in its workforce.

The Seattle software firm, going toe to toe with Microsoft in the fight for digital media supremacy on the Internet, said it would reshuffle its operations into systems software and consumer segments built around its recently announced Helix initiative. This strategy lets companies, institutions and individual developers
license Helix DNA platform source code to build Helix-powered server and
client products.

RealNetworks Chairman and CEO Rob Glaser blamed the depressed economy for Real’s belt-tightening move, for which he said employees will receive a comprehensive package of separation benefits and outplacement services. Simply, he and his management team are looking to swing the company’s finances into the black.

“The impact of the on-going turbulence in the telecommunications industry and the weak capital spending environment on our systems business has caused us to step back and thoroughly review our strategy and operations,” said Glaser in a public statement. “This plan is the result of that review. In spite of the current turbulence, we remain extremely positive about the long-term prospects of our industry and our company.”

Facing stiff competition from Microsoft’s Windows Media
Player, RealNetworks saw sales fall on weaker demand from enterprise
customers in the second quarter this year.

The company reported a net loss that narrowed to $1.6 million (1 cent per
share) in the quarter, compared with a loss of $19.2 million, or 12 cents
per share, in the same year-ago period. Revenues in the quarter dipped to
$44 million from $48 million a year earlier.

RealNetworks’ news Wednesday is consistent with the information presented in its second quarter earnings statement from July 16. No changes in financial guidance were announced except for an estimated restructuring charge of approximately $4 to $6 million resulting from the staff reductions and other related restructuring activities.

Since February 2001, Real has cut about 160 employees from its workforce. Assistant Editor Clint Boulton contributed to this report.

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