Layoffs get under way at MarchFirst
The Internet consultancy is holding meetings to inform employees of layoffs, offering most only a two-week severance package, according to an employee whose job was just cut.
The employee, a consultant who asked to remain anonymous, said the decision did not come directly from managers but from Francisco Partners, which holds a hefty investment in Chicago-based MarchFirst. The employee said that MarchFirst is expected to release an official announcement regarding the layoffs sometime Thursday but offered little information about the future of the troubled Net consultancy
The company is staying mum on the matter. "I cannot confirm or deny any information at this point," said Kelly Miller, a spokeswoman for MarchFirst.
The company has been beset of late by reports of imminent layoffs. In recent months, it has battled a series of setbacks, including a sudden executive vacuum, gloomy financial results and several rounds of layoffs.
"Everyone in the office is sick about the whole situation," said the laid-off employee, who was asked to turn in a company-issued laptop. "I?m just happy to be out of the situation."
On Tuesday, shares of the company plunged to 13 cents a share after a report in The New York Times said MarchFirst is expected to cut as many as 3,000 jobs, or nearly half its work force.
On Wednesday, the Nasdaq Stock Market put a freeze on the company's shares and said trading will not resume until it complies with a request for information.
MarchFirst has had to slash roughly 2,000 jobs over the last few months as it attempts to cut costs, achieve profitability and redirect its focus. Like most players in the dampened Internet consulting sector, MarchFirst has been faced with the challenges of shifting its business to fit the sudden changes in spending from clients that need services such as Web development and help with their online strategies.
Many players in that sector have had a difficult time surviving the downturn.
Earlier this week, Boston-based Viant, another Net consultant, said it is shutting three offices and reducing its head count by 211 to cut costs. Last week, rival Xpedior closed four unprofitable offices and cut nearly half of its total work force. The Chicago-based company also said it is seeking a buyer for all or part of its remaining operations.
Cash-strapped MarchFirst, which nabbed a much-needed $150 million investment from Francisco Partners last December, has until mid-April to settle a loan valued around $53 million with American National Bank and Trust.
The company, which was created by the merger between consultancies Whittman-Hart and USWeb/CKS, employs roughly 6,000 workers in total with numerous offices scattered across the United States and overseas.