Internet consulting company MarchFirst Inc. said Wednesday it would cut corporate expenses to about 10 percent of sales and lay off an additional 550 people and said it would close or consolidate some smaller offices as it completes its 2001 business planning process.
The Chicago-based company said it would “dramatically” cut discretionary spending until it reaches positive operating cash flow.
As part of its cost-cutting programs, Chicago-based MarchFirst plans to close and consolidate its smaller offices in Montreal, Canada and Pittsburgh, Pa. The company also continues to evaluate opportunities for selling non-core assets.
The job cuts, effective immediately and spread throughout the company, are intended to align the company’s service-delivery capacity with projected market
“We have sharpened our focus on our core strengths to position marchFIRST to again lead our industry,” said Robert Bernard, marchFIRST Chairman and CEO. “Over our 17-year history, marchFIRST has adapted quickly to changing market conditions and continued to deliver solutions that meet our clients’ evolving business needs. This flexibility and client focus will serve us well in 2001 as we target three strategic goals: improved profitability, positive cash flow and disciplined growth.”
The company will have a total of 7,600 professionals following the layoffs, MarchFirst said.
Separately, the company also said eligible employees returned options to purchase 25.4 million shares of common stock. Under the terms of the program, MarchFirst will issue these employees options to purchase 8.4 million shares–a new option for one share for every three they cancelled–on July 23, 2001, the company said.
Shares of MRCH closed Wednesday at $2.75, down 11 percent from the day’s open, and well off the company’s 52-week high of $56.5.