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Oxygen to cut two-thirds of Web staff

The move comes as the cable TV and Web media company's marketing deals with AOL Time Warner are under scrutiny by internal investigators at the media giant.

Oxygen Media, a cable TV and Web media company, said this week it plans to pare back Internet operations, dismissing two-thirds of its online staff amid poor economic conditions.

About 30 people at Oxygen.com will lose their jobs over the next three months, leaving 15 people to run the Web site, company spokeswoman Sarah Chaikin said. The newly trimmed-down Web site--which provides news and information geared toward women--will focus on promoting the women's TV network, according to an e-mail sent to staff from Oxygen CEO Gerry Laybourne on Tuesday.

"It's no secret the nature of the interactive industry has changed dramatically over the past 18 months," Laybourne wrote.

"The online side is simply not structured in a way that it can sustain itself economically," she said. "For now, we need to focus on the television component of our business and take a less aggressive stand in the interactive space."

The move comes as the company?s financial and marketing deals with AOL Time Warner are under scrutiny by internal investigators at the media giant, which is the subject of a Department of Justice inquiry into its business practices. In the spotlight are AOL?s ties to Oxygen that included a multimillion-dollar investment in the women's network in exchange for a large advertising deal on AOL.

Laybourne said the company will continue to run Oprah.com, the site for talk-show celebrity and Oxygen co-founder Oprah Winfrey. The 29 staff members of Oprah.com will not be affected by the cutbacks, Chaikin said.

The cutbacks are the fourth for Oxygen.com in the last two years as the Internet economy buckled. Founded in 1998, Oxygen Media has pared back many of its women-focused Web sites in recent years because of weak advertising sales.