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Salon.com trims work force, closes Seattle office

The online magazine lets go 13 employees and closes its Seattle sales office as part of a plan to cut operating expenses by 20 percent.

Online magazine Salon.com laid off 13 employees today as part of a plan to cut operating expenses by 20 percent, the company said.

"This is a proactive step to make sure we don't have to take any other steps," spokeswoman Dayna Macy said. "We are committed to putting out the best content on the Web. We are doing what we can to make sure that we will be here for a long time."

In addition to the layoffs, which represent 9 percent of its work force, Salon closed its Seattle sales office and plans to cut its freelance and marketing budgets. The company does not expect any more staff cuts, she said.

The job cuts at Salon come at a turbulent time for Internet companies. Oprah Winfrey-backed Oxygen.com announced today that it was canceling two shows for the summer and laying off some workers. On Monday, APB Online said it had run out of money and laid off its 140 employees.

The cuts also come as Salon's stock price has floundered. Since debuting on the public markets at $10.50 last June, the company's shares have consistently traded below its offering price. The stock closed up 9 cents today to $2.13.

Macy said the job cuts at Salon came across the board, including its editorial, sales and marketing departments.

Michael O'Donnell, Salon's chief executive, called the job cuts a "surgical move" that would buy the company time before having to raise more funds or turn a profit. Although Salon was criticized for going public last year, the money it received has given Salon both "staying power" and access to financing unavailable to private firms, O'Donnell said.

"We could go out and raise $50 million tomorrow if we wanted to," he said. "That wouldn't make much sense given our current valuation, but we have access to money if we needed it."

Salon's market value is about $24 million.

Salon has not yet said when it might turn a profit, but O'Donnell said the company expects to be in the black within two years. With today's cuts, Salon's current cash should last almost until then, he said.