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Quokka Sports (Nasdaq: QKKA) was up 6 U.S. cents at 25 cents in early trading Tuesday after the online sports company said it would restructure its operations, letting go 59 percent of its 369-person workforce and taking a $1 million charge to first-quarter results.
San Francisco, California-based Quokka said it will focus on its main business of live sports-event coverage, setting up its technology infrastructure business as a separate unit.
Quokka said that the new structure should "considerably" reduce the company's operating loss and cut its cash-burn rate by more than 65 percent, to less than $2 million per month.
"The current financial challenges faced by all media companies in the Internet marketplace today make it necessary for us to diversify our business model beyond sponsorship, content syndication and consumer revenues," said president and chief executive officer Alvaro Saralegui.
The job cuts are the second round of layoffs 
for the company. In
December, Quokka slashed 90 jobs and took a $1.8 million to $2 million
charge to fourth-quarter results.
Quokka's core media business includes the Golf.com Web site, as well as coverage of the Olympics, college basketball, Major League Baseball, the BT Global Challenge around-the-world sailing race, and MountainZone adventure sports.
The company said it reached more than 4 million sports fans in the quarter ended in December, and will focus on those events that have the "strongest financial potential."
During the first quarter, the company will produce events including the PGA Tour's Southern Swing golf tournaments on Golf.com, the Men's and Women's Division I NCAA basketball championship tournaments on FinalFour.net, and ongoing coverage of the BT Global Challenge on BTGlobalchallenge.com.
"Our new model will allow us to expand our event opportunities and pursue
new business that in the past we have been unable to accommodate, such as
live event coverage for third parties," Quokka senior vice president Tom Newell said. "With more flexibility 
in the way we monetize our coverage of events, we will be able to continue
to provide state of the art sports entertainment coverage while decreasing
costs."
As a separate business unit, the company's technology division will provide
managed services for companies needing to create content for the Internet,
broadband, interactive TV and wireless platforms.
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