Egghead Cuts 178 Workers

Egghead.com (Nasdaq: EGGS) is slashing its workforce yet again.

In a bid to survive in a slumping economy, Egghead.com said Friday that it has given pink slips to 21 workers in the company's Menlo Park, California offices and to 157 workers in its Vancouver, Washington facility.

The cut will reduce Egghead.com's workforce by 29 percent. The company said that a number of senior and mid-level managers will lose their jobs in the across-the-board reduction.

Egghead.com also said the move was part of its continuing efforts to "right-size" the company. Six months ago, the e-tailer moved approximately 20 percent of its staff from Silicon Valley to Vancouver.

Twice Burned

"[This year] is proving to be a challenging year for most technology-related businesses, and we are positioning ourselves to stay ahead of changing business conditions," Egghead.com president and chief executive Jeff Sheahan said.

The latest job cuts come just weeks after Egghead.com announced that it was laying off 77 employees to cut costs and said that its chief financial officer, John Labbett, was leaving the company to "pursue a new opportunity closer to his home in Los Angeles."

Egghead.com senior vice president of sales Norm Hullinger left the company as well.

Egghead.com has been struggling of late, but after its first round of layoffs, the company got a cash infusion in the form of a loan from IBM's (NYSE: IBM) commercial financing wing, secured with Egghead.com's inventory, accounts receivable and other assets.

On Target?

According to Sheahan, Egghead.com has "gained experience" with its new business-to-business (B2B) strategy, in which it is targeting the small to mid-sized business market. The company recently said it expects the average transaction size for customer purchases to increase as a result of its shift in focus toward selling to businesses instead of consumers.

"Today's action in no way lessens our commitment to our B2B focus," Sheahan said.

Egghead.com, which started its life as a brick-and-mortar store, is now a pure-play Internet retailer selling software and related products. The company's stock has suffered in recent months, falling Friday to 62 cents, far from its 52-week high of $7.62.

For the fiscal year ended December 31st, Egghead.com's revenues fell 12 percent to $478.8 million and its net loss fell 60 percent to $62.2 million.

Layoff Tracker

Intel (Nasdaq: INTC), Cisco, Nortel (NYSE: NT), Dell, 3Com and Motorola (NYSE: MOT) have all cut their workforces in varying degrees since the start of the year.

Their displaced workers join the dot-com workers terminated by such e-tail companies as Amazon.com, Kozmo and Buy.com.