Citing the “changing dynamics in the Internet advertising market and the overall economy,” online financial news outlet CBSMarketwatch.com (Nasdaq: MKTW) announced Wednesday that it is slashing its workforce by more than 15 percent as a cost reduction measure.
The San Francisco, California-based content provider, which counts British media group Pearson and CBS parent Viacom as backers, also said it will trim “discretionary spending” in such areas as marketing, travel, entertainment and contract services.
The company said the cuts would result in a savings of US$9 million, excluding a restructuring charge, for its operating budget through the end of the year.
Marketwatch.com chairman and chief executive officer Larry Kramer said the cuts are part of the company’s financial goal of generating positive cash flow by the end of the year.
“With the slowdown in advertising revenue and the uncertain economic outlook for the rest of the year, we believe it is prudent to implement these additional cost reduction measures,” said Kramer. “As painful as this process is, we believe that we will emerge stronger and more agile to meet the challenges this market presents.”
Kramer added that Marketwatch.com will also continue to diversify its revenue streams through licensing and other media opportunities.
In its first-quarter results released last month, Marketwatch.com posted a smaller-than-expected loss, but saw revenue slip along with demand for advertising.
The company said its ad revenue dropped to $5.2 million from $8.7 million in the year-ago quarter, while licensing revenue, which includes subscriber fees, spiked 103 percent from a year ago, to $5.9 million.
Marketwatch.com forecast in April that its total 2001 revenues would see a 5 percent decline due to the slowdown in ad spending. At the time, Kramer also hinted that job cuts were in store for the company, saying that he expected its 255-person workforce to be smaller by year’s end.
A combination of factors in recent months has prompted a wave of consolidation and shakeouts in the Internet media industry, as companies try to ride out the stock market downturn and growing economic uncertainty.
Last month, Marketwatch.com competitor CNBC.com unveiled plans to combine operations with Microsoft’s MoneyCentral site.
Meanwhile, financial news service MotleyFool.com said in February that it had handed pink slips to 30 percent of its staff, or 115 employees from a staff of 355, in its U.S. and UK offices. The company also discontinued its online marketplace Soapbox.com, which had been launched only six months prior.
The move followed on the heels of similar cutbacks at TheStreet.com, which said in November that it was eliminating 20 percent of its U.S. jobs, closing its UK operation and ending a joint venture newsroom with The New York Times.