Beyond.com hits hard times

Beyond.com will lay off around 20 percent of its work force in a restructuring move that will shift the company’s focus away from consumer sales.

Beyond.com will lay off around 20 percent of its work force in a restructuring move that will shift the company’s focus away from consumer sales.

The company's CEO and president, Mark Breier, will step down and will be replaced on an interim basis by Chief Financial Officer Rick Neely, who joined the company in December.

Breier said in a release that he plans to advise and invest in Internet startups.

"Beyond.com’s transition to a B2B (business-to-business) company is the right direction for the company," Breier said in a release. "While I've enjoyed the challenges of running a top Internet shopping site, Beyond.com now needs a CEO with B2B expertise and the vision to lead the company."

Sluggish consumer sales
Beyond.com (Nasdaq: BYND) will eliminate around 75 full-time jobs and consolidate its satellite offices. A one-time charge of US$2 million to $3 million is expected for the first quarter of 2000.

Beyond.com said sales in its government division have grown from US$9.8 million in 1998 to US$30 million in 1999.

The company said earlier this month that fourth-quarter results would fall short of expectations “due to sluggish consumer sales.”

The company also said at the time that it was planning to focus more on business and government sales and that "our consumer business was hampered by an extremely competitive environment in the consumer software reseller space and by our choice not to spend advertising dollars to help drive customers to our Web site."

Sales for the fourth quarter are expected to be between US$34 million and $35 million, far short of the $50 million analysts were expecting.

It's not the first company to be hit by a shakeout that analysts predicted would hit once the holiday season was over. Three weeks ago, Value America said it was laying off 47 percent of its work force as part of a restructuring.

While analysts expect holiday sales to top out at nearly US$8 billion, online retailers are facing some serious challenges to stay afloat. Some categories, such as pets and beauty supplies, have been swamped by multiple lookalike players. Meanwhile, real-world companies have gotten increasingly savvy about competing with the "dotcoms."

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