MarchFirst cuts budget, lays off more workers
The struggling Internet consultant is laying off 550 people in its second round of staff cuts and is reducing expenses to about 10 percent of sales.
The cuts, which were spread across the company, will leave MarchFirst with 7,600 employees worldwide. The company laid off an undisclosed number of employees the first week of January and 1,000 employees in November 2000.
The company will also shutter smaller offices and "dramatically" cut discretionary spending until it reaches a positive cash flow, according to a statement.
The changes are "intended to align MarchFirst's service-delivery capacity with projected market demand," the company said in a statement.
The entire Internet consulting arena has been hard hit by the dot-com downturn, which has left companies with fewer clients blessed with unlimited budgets. Internet consultancies, including iXL Enterprises, Scient and Viant, which focus on providing clients help with Web development and devising their Internet strategies, have recently announced layoffs and restructuring plans as a way to cut costs.
MarchFirst, which was created from the merger of management consulting firm Whittman-Hart and Web consultancy USWeb/CKS, has seen its shares plummet from a 52-week high of $56.50 to a low of $1.
The company recently received a $12 million interest-free loan from existing investor Microsoft and a $150 million investment from equity firm Francisco Partners.
MarchFirst stated in a recent filing with the Securities and Exchange Commission that it needed approximately $50 million in additional financing through the end of 2000 and another $50 million in early 2001 to refinance its existing bank facilities and to meet its liquidity needs for the foreseeable future.