QXL denies restructuring reports after raising £30m
Online auction firm QXL (quote: QXL) confirmed Thursday that it had successfully completed a £30m round of funding, but denies reports that this will lead to a quarter of its 400 staff being made redundant next year.
The financing secured primarily by investment bank Credit Suisse First Boston means that QXL has £80m in cash, which analysts believe should make it profitable by 2003.
The reported redundancies were thought to be part of an effort to reduce overhead costs in order to move the company towards profitability earlier than expected. QXL has denied reports of a restructuring plan, claiming that a reduction in operating expenses will be enough.
Stan Laurent, president of strategic development at QXL has denied there will be any sackings. "We're integrating a number of companies that we have recently bought, and in the process some rationalisation has happened, but there will be no major restructuring," he says. Laurent confirmed that there have been a lot of voluntary departures recently, particularly in the companies that QXL has recently acquired, and said that there will be a cut-back in its marketing spend. Since the third quarter of this year the company has cut back its operational expenses by 33 percent.
QXL has been under increasing pressure from the growing slump in technology shares across the board. Its shares -- trading on the London Stock Exchange -- fell a further 30 percent to 17p, when earlier this year they were trading as high as 800p. The value of the company has dropped this year from £2bn to £75m.
"You don't run a business for the stock market, you run it for profitability," said Laurent. "That is what we're focused on -- the current moves on the stock market isn't something that we can deal with."
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