Women.com Cuts Quarter of Workforce

Just one day after women's online network Oxygen Media said it was paring down its workforce and consolidating operations, niche competitor Women.com announced that it is laying off 25 percent of its workforce in a bid to trim expenses and achieve profitability.

As part of what the company called "proactive cost-cutting initiatives," Women.com eliminated 85 jobs.

"The streamlining of our business operations, among the toughest decisions made by any company, reflects the need for Women.com to remain nimble in a fluctuating industry," said company chairman and CEO Marleen McDaniel.

McDaniel added that the company will now focus its sales group on "large, established accounts" in traditional markets.

The terminations are the first large-scale workforce reduction for the San Mateo, California-based company, which was founded in 1992.

Shakedown Story

Women.com pointed to the harsh financial climate being weathered in the e-commerce arena as a key factor in its decision to reduce operating costs.

In its latest financial results, the company reported growing losses and a decline in revenue. During the third quarter, Women.com said its revenue totaled US$8.8 million, a drop from $12.3 million in the previous quarter. It also had a nearly $30 million net loss, compared to a loss of $17 million for the same quarter last year.

The company is slated to discuss its expectations for 2001 revenue, operating expenses and earnings later this month.

Solid Target

Despite these disappointing figures, the company maintains that women's portals are a viable business model. "We move into 2001 as a strong and more flexible company," McDaniel said.

Often among the top 50 most visited Internet properties, Women.com publishes 200,000 Web pages in 18 channels, covering topics including health, home life, parenting, finances and career. The company also offers Web programming, community pages and shopping services.

Oxygen's Low

Rival women's network Oxygen Media faced similar woes this week. On Tuesday, the company let go 44 full-time and 21 part-time employees in cuts amounting to under 10 percent of its workforce. In addition, Oxygen is undertaking an online restructuring, trimming its batch of Web sites to 4 from 12.

Oxygen Media also said it is closing its Seattle, Washington office to redirect resources and merge operations in its New York headquarters. Earlier this year, Oxygen gave pink slips to a handful of employees for financial reasons, cancelled a couple of television shows and terminated the e-commerce arm at one of its sites.

The company had good news on Monday, however, when it announced that it had closed US$100 million in financing from Microsoft (Nasdaq: MSFT) co-founder Paul Allen's Vulcan Ventures to develop online, cable and other media programming initiatives.

Chief executive officer Geraldine Laybourne said the investment was a "vote of confidence in Oxygen" that will help the company stay on track to reach profitability.

"We continue to believe that the Internet is made for women and that our future is built on the convergence of both TV and online," Laybourne added.

More Than Gender

Although women outnumber men online in the U.S., some industry analysts say that the difficulties being faced by niche sites -- and, in particular, e-commerce ventures aimed primarily at women -- stem from their reliance on catering to a narrow demographic group.

Analysts advise that these targeted sites need to focus on specific online behaviors and trends by particular groups, rather than viewing women as the intended audience.