"The reason behind this is to increase efficiencies and improve operations," BlueLight spokesman Dave Karraker said.
BlueLight will continue to oversee the Web operations, Karraker said. He would not comment on the number of employees laid off under the reorganization.
BlueLight, which recently announced that it had moved into second place behind Sears.com among the most trafficked of the mass merchandisers, is 60 percent owned by Troy, Mich.-based Kmart. On March 1, BlueLight dropped its free, unlimited Internet access service and moved to a fee-based system for its roughly 6 million customers.
Predicted to become "category killers," the e-commerce stores of large brick-and-mortar chains were supposed to benefit from the deep pockets, recognizable names and buying power of their parent companies. But the Net units of big, traditional retailers have not been immune to the ills that have collapsed many e-commerce sectors in the past year.
Other Web offspring that have labored to mirror their parents' offline success but have fallen short are Toysrus.com, Barnes&Noble.com and Sears.com.