"1997 is year of implementation to get revenue to grow," said Jeff Irby, CyberCash's new vice president of sales and marketing. "What we need to do is be very efficient."
The layoffs cut some midlevel managers plus employees in telemarketing, software development, and operations. But Irby said the company is hiring project managers to help merchants and banks implement the CyberCash payment system.
CyberCash, highly visible in the Internet payments world, has been hurt because consumers aren't shopping on the Net as quickly as it predicted. The layoffs also may staunch last year's flow of red ink.
CyberCash, with offices in Reston, Virginia, and Redwood City, California, lost $26.5 million on $127,000 in revenue in 1996, with $50,646 in revenue in the last quarter. At year's end, the company had enough cash to carry it about four quarters at its current "burn rate," or rate of losses.
Last month, Hambrecht & Quist, the investment bank that brought CyberCash public a year ago, downgraded its recommendation because Internet shopping hasn't taken off. H&Q said CyberCash would not meet H&Q's projected $25 million in revenue this year. The stock fell 21 percent after the H&Q report.
"We set an operating budget that meets Wall Street expectations by analysts," Irby said. He expects expenses to run $30 million this year; analysts expect revenues of $6 million to $10 million, figures Irby thinks CyberCash can make.
CyberCash now offers three ways for buyers to pay: credit cards, its CyberCoin form of electronic "cash," and its PayNow electronic check service, which went into trials last month. CyberCash takes a fee for each transaction it handles.
Relying on service revenues has required CyberCash to spend huge amounts of money developing software for consumers, merchants, and banks or credit card processors. The company, which gives away its software, also markets itself to banks and Internet merchants, which can distribute its "wallet" software to consumers.