Epinions lays off 27 percent of staff
Epinions, one of the most highly touted second-generation Web start-ups, lays off 24 employees, citing a renewed push toward profitability.
Epinions, an advertising-supported online forum for product reviews by consumers, laid off 24 of its 88 workers, or 27 percent. The across-the-board cuts come just weeks after the start-up completed a redesign and weeks before it will announce new financing that executives insist will sustain it to profitability.
"More than anything this is a reflection of and a response to the demand for profitability," said chief executive Nirav Tolia. "With this reduction and the financing we will get there."
In addition to its recent redesign, Epinions has marked a number of growth milestones in the past year. Revenue grew more than 350 percent between July and December, the user base doubled in the same period, and the company reduced operating expenses by 50 percent not counting the layoffs, according to Tolia.
"The company is smarter and better-positioned even going into this, which is why this is particularly painful," Tolia said. "But we have a plan, we have a powerful platform, and it's just a question of executing. We're very focused on profitability and that's the light at the end of the tunnel for us."
Epinions launched nearly two years ago as part of a wave of so-called second generation Web start-ups, founded by veterans of the first big Web businesses. Before cofounding Epinions, Tolia was an early employee at Yahoo and founder of Silicon Valley schmoozefest Round Zero. Other founding executives came from Netscape, @Home, and other first generation Web businesses--and many left millions of dollars' worth of options behind them to found the start-up.
The company's first round of funding in May 1999 raised $8 million from Benchmark Capital and August Capital. The second round, in October 1999, raised $25 million from Goldman Sachs, Dell Computer, Bowman Capital, Benchmark Capital and August Capital.