In the latest dirge, Boston-based Viant on Tuesday said it is shutting three offices and reducing its head count by 211 employees, or 38 percent, in an effort to trim costs as the demand for its services continues to soften. Viant, which has suffered a string of lackluster quarters, also expects to post a wider-than-anticipated, first-quarter loss.
"Obviously this is a challenging day for us here today at Viant," Chief Executive Bob Gett said during a conference call Tuesday with reporters and analysts. "We have a lot to do."
Viant executives said the revenue shortfall was tied to the uncertainty in the overall environment and the fact that many clients are holding off spending on consulting services. Viant also said it sees softening demand from European clients as well.
Like others in the once-hot market, Viant has been staggering because of a harsher economic climate and a slowdown in spending for e-commerce initiatives, in part among dot-com clients. Viant's troubles began shortly after the demise of several dot-coms that were once top-tier clients of many Web consultancies.
Viant, along with rivals such as MarchFirst, Scient and Xpedior, has had to cut its work force and implement other cost-cutting measures in an effort to save money amid the rough times. Last December, Viant slashed about 125 jobs, roughly 17 percent of its worldwide staff. At the same time, the company announced plans to shut its Dallas office.
Just last week, Chicago-based Xpedior closed four unprofitable offices and cut approximately 300 jobs, or 42 percent of its total work force. The beleaguered company said it is seeking a buyer for the sale of all or parts of its remaining operations.
As part of its new restructuring plan, Viant said it is shutting down its Houston, San Francisco and Munich offices. It also intends to take a first-quarter charge of approximately $13 million to $17 million for severance and other related expenses.
For the quarter, Viant said it expects to post a greater-than-expected loss, in the range of 33 cents to 36 cents per share, on revenue of about $14 million to $16 million. Analysts polled by First Call had anticipated that the company would report a loss of 20 cents and post quarterly revenue of $19 million.
The company expects to have approximately $165 million in cash as of March 31, after restructuring and related charges are taken.
"It goes without saying, the management team is very committed to regaining profitability as quickly as possible," Gett said. "At the end of the day, we have to reposition the company for the demand that we anticipate will be in the marketplace."
With the restructuring measures, Viant said it is aiming to reduce costs in the range of $40 million to $44 million on an annual basis. Those savings will not largely impact the company until the third quarter. Executives did not give further projections in terms of client wins and backlog status, except to say that revenue generation will be lower than average for the March quarter.
Viant, which has provided Web development and consulting services to such clients as Compaq Computer, Polaroid and Sears, also on Tuesday announced the resignation of Sherwin Uretsky, the company's chief business development officer. Uretsky, who spent about three years with Viant, is leaving to pursue other interests, the company said. No replacement had been named.
In separate news, Viant said its board has adopted a "shareholders rights plan," which would prevent a hostile takeover. Viant said the plan is designed to assure stockholders of fair value in the event of an "unsolicited" business combination or similar transaction involving the company.
Each right will initially entitle stockholders to buy a fractional share of Viant's preferred stock for $21.75. The rights, however, will only become exercisable upon the occurrence of certain events, such as a person or group acquiring 15 percent or more of Viant's common stock.
Viant added that the plan was not adopted in response to any attempt to acquire the company.
Still, consolidation has already commenced in the battered sector. Earlier this month, network software provider Novell acquired Cambridge Technology Partners, which was one of the first consultancies to turn its focus to the Internet. Several analysts and industry observers have said that more partnerships and acquisitions are likely.
Viant's continues to operate its offices in New York, Atlanta, Chicago, Los Angeles and London.