Egghead Slips on Job Cuts

Egghead.com (Nasdaq: EGGS) was down slightly at 78 cents, losing 3 cents in morning trading Tuesday, after the computer e-tailer said that it would lay off 77 people in order to cut costs and focus on profitability.

Egghead said that the job cuts affect full-time and temporary employees and contractors at the company's Menlo Park, California headquarters, as well as at its Vancouver, Washington offices.

"Today's reduction in force is a further step in our ongoing commitment to streamline the business and sharpen the focus on our business customers," said Egghead president and chief executive officer Jeff Sheahan.

Sheahan said the company plans to increase productivity as it continues a "drive toward profitability in the fourth quarter of this year."

In January, Egghead said fourth-quarter sales for 2000 which ended December 31st would fall below previous projections because of slow demand for personal computers and related products.

"We are pleased with the progress in our business accounts program, which offset some of the downward pressure on margins as a result of seasonal factors and our promotion activities," Sheahan said at the time. "This, combined with expense reductions, enabled us to reduce our operating losses for the fifth consecutive quarter as we continue our march toward profitability in the fourth quarter of this year."

Egghead reported fourth-quarter revenue of $91.6 million, down from $153.2 million a year earlier. The net loss for the quarter narrowed to $9.6 million, or 23 cents per share, from $90.4 million, or $2.44.

The company's cost-cutting plans included the September shift of 20 percent of Egghead's staff from Silicon Valley to Vancouver.

Egghead shares are down from a 52-week high of $10.50. The 52-week low was 50 cents.