[email protected] trims staff and Web site

[email protected] is to lay off a quarter of its workforce, drop several online services, and close a subsidiary in an attempt to cut...

[email protected] is to lay off a quarter of its workforce, drop several online services, and close a subsidiary in an attempt to cut expenses during trying economic times.

The company serves over three million broadband subscribers but has been punished by lagging advertising revenue. Rumours have circulated that [email protected] may imminently declare bankruptcy, but company officials claim that is speculation.

The US telecom provider, AT&T, maintains a 23% stake in the company.

[email protected] will lay off about 500 employees over the next three months. This follows previous moves by the company to reduce its emphasis on online media and low-bandwidth Internet access, according to Stephanie Xavier, a company spokeswoman.

"We are continuing to focus on our core broadband access business," Xavier said. "We have made some changes to our media assets, which is something we said previously that we would."

Changes to the company's media ties include the cancellation of many co-branded consumer-oriented shopping sites and game sites. [email protected] would previously direct users to a site shared by itself and a retail partner, but will now push all users to partners' Web sites over the next few weeks.

"There was a lot of expense in maintaining those sites," Xavier said.

However, the company will not change its e-mail, instant messaging, news, search engine and other central features.

[email protected] will also close its MatchLogic subsidiary. MatchLogic provided interactive marketing services for [email protected] and was one of the parts of the company hardest hit by the slowdown in advertising spending. A skeleton crew of about 40 people will phase out MatchLogic's operations by the end of the year.

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