Dotcom layoff: NBC Internet cuts 20% of staff

Some 170 employees will lose their jobs at the company struggles to achieve profitability.

NBC Internet Inc. said it has cut 170, or 20 percent, of its 850-person work force as the online media company tries to lower costs and reach profitability faster.

The San Francisco company was formed in November from the combination of Internet portal Snap.com with Xoom.com, a home-page and storage site, and NBC Internet assets.

NBCi (nbci) last month reported a wider-than-expected second-quarter loss, blaming a weakening dotcom advertising market. NBCi warned in June that it would report revenue below analysts' expectations and a wider-than-expected loss for the second quarter and the rest of the year.

The job cuts at NBCi were across the company's various departments, with the goal of hitting an employee total of 680 by year end.

"We're streamlining our cost structure to become more competitive," said Chief Executive William Lansing.

He said the company's business model is shifting, as it moves to emphasize more direct marketing in commerce and advertising from just Internet advertising. NBCi is also trying to reduce its reliance on Internet companies, which produce about 90 percent of the company's revenue. It is trying to win more traditional, or offline, advertisers, though it may take a year or more to reduce the company's dependence on dot-coms for advertising revenue.

The layoffs also should help the company become profitable faster, though . Lansing declined to offer a revised target date. Analysts expect the company to be profitable, excluding noncash charges, by mid-2002.

NBCi has more than $350 million in cash on its balance sheet, Lansing said.

NBCi, whose biggest shareholder is General Electric Co.'s NBC Inc., said it is still on track to launch its new portal in the fall under the unified NBCi name. The company said earlier this year that it would eliminate its Xoom.com and Snap brands.

Shares of NBCi were down 3.69 percent, trading at $10 19/32 in early trading Wednesday.