Want CNET to notify you of price drops and the latest stories?
No, thank you Accept
X
WWDC: Everything Apple AnnouncedCNET CouponsSleep With Socks OnBest Solar CompaniesRemote Working in ParadiseBest Satellite Internet ProvidersCurrent Mortgage RatesMeal Subscription vs. Takeout

eToys cuts staff by about 70 percent

The online toy retailer, which cautioned about layoffs last month when it issued an earnings warning, lays off about 70 percent of its work force.

headshots_greg_sandoval_140x100.jpg
headshots_greg_sandoval_140x100.jpg
Greg Sandoval Former Staff writer
Greg Sandoval covers media and digital entertainment for CNET News. Based in New York, Sandoval is a former reporter for The Washington Post and the Los Angeles Times. E-mail Greg, or follow him on Twitter at @sandoCNET.
See full bio
Greg Sandoval
Beleaguered eToys, one of the last pure online toy retailers, laid off about 70 percent of its staff Thursday, the company announced.

Los Angeles-based eToys notified about 700 of its approximately 1,000 employees that they would be laid off. Of the 700, about 380 were laid off today with the remaining 320 to be laid off by March 31.

eToys also said Thursday that it planned to shut down warehouse operations in City of Commerce, Calif., and Greensboro, N.C., in the next 30 to 60 days, consolidating those operations within eToys' existing distribution centers in Ontario, Calif., and Blairs, Va.

The company cautioned about layoffs last month, when it issued an earnings warning that revenues for its third fiscal quarter could be half of what analysts expected.

As a result of a revenue shortfall, eToys said, it will run out of cash around the end of March. It has begun exploring options to sell the company or its assets.

Calls to the company were not returned.

The toy sector is one of the most ravaged sectors in the Internet shakeout, suffering from paper-thin margins, grueling competition and investor disillusionment. Last spring, Disney-backed Toysmart.com and Los Angeles-based Toytime.com closed down.

In September, the nation's second largest toy merchant, Toys "R" Us, gave up running its own Web site and launched a joint toy-selling venture with Amazon.com.