Los Angeles-based Radio Free Virgin, part of Richard Branson's Virgin Group conglomerate, said it has dropped to 11 employees from 26. The company said the layoffs affected people working with content programming.
Zack Zalon, general manager of Radio Free Virgin, said in a statement sent to CNET News.com that the layoffs were in "response to a shift in current internal business needs." He added that Radio Free Virgin intends to bring back a portion of its staff on an as-needed contract basis. In the meantime, the company will use several employees from a sister company, Virgin Entertainment Group, to keep services running.
The online radio service is not alone in making such cuts. As the dot-com and advertising slowdown drags on, small online music ventures such as ClickRadio and MusicBuddha are shutting down or cutting back.
Some services are relying on alliances with online giants such as AOL Time Warner and Yahoo. Although the Virgin Group has a substantial war chest, its properties stretch from Virgin Atlantic airlines to record labels and retail music stores, diluting any online focus.
The company said laid-off employees were notified last week and given compensation packages.
Despite the staff reduction, Radio Free Virgin said it will continue its services, which were launched last year. The company lets music fans listen to streamed audio via a free, downloadable digital player. Users also can read album information, browse reviews and purchase music.
Radio Free Virgin has been building partnerships with companies such as RioPort and Music.com in hopes of shifting music fans from free file-swapping services. Radio Free Virgin has also been working with the music industry to protect artists' rights by unplugging a record feature on its digital media player, for example.