Drkoop.com to cut staff by a third
The cash-strapped online health care site plans the layoffs as part of its strategy to cut costs and streamline operations in an attempt to turn a profit.
The move is part of the company's plan to cut costs and streamline its business operations. Last week cash-strapped Drkoop said that it had received more than $20 million in equity financing and had appointed a new management team. The company named former Excite@Home executive Richard Rosenblatt as its new chief executive officer, along with Edward Cespedes as president and Stephen Plutsky as chief financial officer.
In recent months, Austin, Texas-based Drkoop has seen its stock plunge to between $1 and $2 per share, far below its 52-week high of $24.50. The company has traded as low as 65 cents a share. Competitors Healtheon/WebMD and Drugstore.com have also experienced falling stock prices. Both are trading near their 52-week lows of $11.18 and $4.68, respectively.
Drkoop executives described the layoffs as a financial necessity.
"We said from the beginning that we were going to run this company like a real business," Cespedes said in a statement.
A Drkoop spokeswoman said the company had 79 employees before the layoffs. With today's layoffs, 42 were cut from the payroll--22 full-time and 20 part-time workers. Another 10 positions that were open will not be filled, she said. The cutbacks did not come from any particular department.
"There are real people behind these layoffs, and these were not easy decisions. However, we are ready to put the past behind us and move forward with our plans to rebuild this company and maximize shareholder value," Cespedes said.