With the appointment of a new president and chief operating officer Wednesday, online advertising company 24/7 Media strongly hinted that a slashing of the employee roster is in the works.
As Tom Detmer, the former president and chief executive officer of 24/7 Media acquisition Exactis.com, takes a hands-on operating role in the company — leaving chief executive officer David Moore to handle more strategic planning — part of his responsibilities will apparently be deciding who gets the axe. The press release announcing his appointment said his main mission would be to introduce “increased operational efficiencies” — code words for layoffs.
“We are going to look at opportunities to eliminate redundancies,” said Moore, in an interview with Internet Advertising Report. “In this market, we are looking to be profitable sooner, rather than later.”
In an e-mail memo to employees signed by both Moore and Detmer, the executives cited a need to “eliminate duplication across the organization, reallocate resources and aggressively pursue those initiatives that can generate the maximum return.” Areas to be eliminated would also be determined by “rates of growth, operational efficiencies and profitability,” according to the memo.
Moore declined to point out any areas in which obvious duplication exists, saying Detmer had just taken the helm and would be making those determinations in the next few weeks. Silicon Alley-based 24/7 Media is set to announce earnings on November 8. Consensus estimates have the company losing $0.47 a share. The company’s stock closed on Wednesday at $5.50, off its 52-week-high of $65.25.
Other companies in the online advertising space have been struggling as of late, with several announcing that they would not meet Wall Street’s estimates for the third quarter. One player, CMGI-owned Engage, laid off 175 workers, citing a need to eliminate duplication brought about by acquisitions.
“What had been a very robust environment,” said Moore, “has obviously changed dramatically.”