After hitting rock-bottom a month ago when it announced the departure of its biggest customer, things will get even worse for InsWeb Corp. (Nasdaq: INSW) shares Monday.
The provider of online insurance services said Sunday it expects to cut its workforce by 40 percent over the next two quarters and warned revenue will be below expectations.
Shares closed at 2 15/16 Friday, having hovered just above 2 for the last month. The company previously said revenue would dip due to the departure of its largest customer.
The company said Monday it would cut 40 percent of its staff of 200 as is discontinues some operations and consolidates others.
InsWeb said it expects revenue for the second quarter to be about $5 million, as previously forecast on April 18, and sees one-time charges during the quarter. The charges will come from a planned restructuring and the discontinuation of Benelytics Inc., InsWeb's partnership with eHealthInsurance.com.
Insweb said the near-term effects of the restructuring will hurt revenue for the balance of fiscal 2000. Sales will be significantly lower than original projections. First Call Corp.'s most recent consensus figure expected the company to lose 32 cents a share in its second quarter. The amount of the one-time charges or revenue shortfall was not released.
Insweb said staff cuts, as well as $75 million in cash and short-term investments as of the end of March, should give it enough cash to operate "comfortably" through 2002, when it expects to begin generating profits.
The company also announced Mark Guthrie, the company's operating chief, will also take on the role of president.
The company counts Intuit (Nasdaq: INTU) and Equitex (Nasdaq: EQTX) among its competitors, according to Hoover's Online.