Associated Press
SEATTLE — It has been a rough week for Seattle’s Internet industry, with three companies laying off a total of 173 workers in two days.
It started Wednesday when Gear.com laid off a third of its work force and its president resigned. An estimated 23 positions were lost.
On Thursday, two more companies announced layoffs. Recently acquired OnHealth.com’s Seattle offices were all but shut down by its new parent company, WebMD, in a cost-cutting measure. About 65 employees lost their jobs.
And OnVia.com, despite having $180 million in the bank, laid off 80 workers in Seattle, 20 percent of its work force here, and another five workers in Vancouver, British Columbia. The company’s news release said the jobs were "redundant."
Though new companies continue to start up in the Seattle area, there have been more than 900 layoffs since May 31, according to published reports.
OnVia.com vice president Gretchen Sorensen said that despite the company’s fat bankroll, the layoffs were necessary for long-term profitability. OnVia.com, launched in 1996, has yet to turn a profit.
On Thursday, health Web site WebMD laid off approximately 65 people at recent acquisition OnHealth.com. Workers there were given severance and a chance to relocate to WebMD’s Atlanta offices.
WebMD said its consolidation efforts, including cutting 1,100 jobs nationally, would save $250 million a year. Shares of WebMD were up 44 cents to $14.44 Friday morning on the Nasdaq, coming on the heels of a 24.4 percent rise Thursday after the layoff announcement.
Gear.com, an online sporting goods retailer, also laid off about a third of its work force on Wednesday, about 23 people, and president Ken Blue resigned amid questions about the site’s growth.
In Gear.com’s case, the worry was about growing too fast to support itself.
"The cash lasts a lot longer in a smaller organization, and that’s what drove the restructuring," said Kevin Quigley, Gear.com’s vice president of marketing. Quigley and chief financial officer Joe Kenny took over the presidency.
Quigley said the company still had enough cash to operate into 2001, even without the layoffs. Gear.com received $12 million from investors in July.
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