Wired Digital, a property of Wired Ventures, said today that it will cut 20 percent of its workforce as it seeks to become profitable in late 1998.
In addition, the company said it has not ruled out another attempt at an initial public stock offering. Wired Ventures, which publishes Wired magazine and related Web sites, failed twice in its efforts to launch an IPO last year.
The company will cut 33 positions, all of which will come from its money-losing Wired Digital unit. Lifestyle sites like the Rough Guide travel service will be phased out, while others will be combined, said Andrew de Vries, director of marketing and communications at Wired Digital.
At the same time, he said, HotWired and Wired News will expand their content.
With the latest round of layoffs, De Vries said Wired Ventures is completing a restructuring strategy that it began in late 1996 to meet its 1998 profitability goal. In the last 12 months, the digital unit has cut 17 percent of its workforce, excluding the layoffs announced today.
Wired Ventures, which has a staff of 278, said Digital will operate with a staff of 115 after this most recent round of layoffs, and de Vries said no other layoffs are anticipated through next year. He added that the company's magazine unit is profitable and will not reduce its staff.
In January, Wired Ventures raised $21.5 million from institutional investors, following its second failed IPO attempt. The company cited poor market conditions when it withdrew its plans to go public.
Although the company said at the time that it did not foresee an IPO in the near future, Jeff Simon, Wired Ventures' chief financial officer and operating officer, said today that "all options are open."
The company had expected to raise between $50 million to $60 million with its IPO and aspired to expand into television and other areas, Simon said. But after its IPO plans fell through, the company instead decided to concentrate on the areas where it has the greatest prospects of making profits in the short term, such as Wired magazine.
Simon said investors are neither pushing the company to turn a profit by late 1998 nor driving its corporate strategy.
He added that, based on the scaled-back plans to break into new businesses, Wired Ventures now expects to hit profitability sooner than planned. That expectation holds even though the company will be working with less money and without public status.
Wired Ventures, according to its IPO filing, had posted a $42.8 million loss during the first nine months of 1996.