Internet consulting firm Viant said today that it will slash 38 percent of its workforce, or 211 employees, and close its offices in Houston, San Francisco and Munich, Germany, in an effort to reduce costs.
The Boston-based company also said it expects revenue for the first quarter of fiscal 2001 to be approximately US$14 million to $16 million, a loss of 33 cents to 36 cents per share. Analysts had projected that the company would lose 20 cents per share for the first quarter.
In a statement, the company said it would take a charge of between $13 million and $17 million during the first quarter because of severance and other job-related costs. Viant said it anticipated that it would have $165 million in cash on March 31.
Viant and other consulting and systems integration firms have fallen victim to the slowing economy, which has led some firms to cut their IT consulting budgets in an effort to control spending.
Just last week, Computer Sciences Corp. said it would cut as many as 900 jobs because of an earnings shortfall. And Xpedior Inc., a Chicago-based e-business consulting firm, also announced last week that a decline in revenue had prompted it to lay off 300 employees, or 42 percent of its workforce. Xpedior also closed four offices.
In December, Viant reduced its workforce by 125 people, including 99 consultants, and Internet services firm Scient in San Francisco laid off 460 employees.
"This is not good news [for Viant]," said Albert Nekimken, an analyst at Input, a market research firm in Vienna, Va. "There is a lot of gloom and doom [in this space] because customers are spending less. The problem is these companies expanded too fast. They were overly optimistic [about the future of the market].
"The already-established companies that are doing better expanded their business in a more rational way," Nekimken added. "They didn't have fast growth spurts. These companies built offices where they had customers. But Viant [and others] seemed to set up offices hoping the customers would come to them."