They aren't profitable anyway - is this really in reaction to decreased revenue or is it a culling and reorg, timed and justified opportunistically to avoid bad PR and publicity?
They are losing money and have always been. They are spending a ridiculous amount of money to bring in clients through ads and other marketing channels, and the whole thing simply doesn't look too sustainable.
It's what they do if there is not a healthy market with lots of innovation and competition. It is a dieing (of maybe stagnant and on the decline) market where the few remaining are squeezing out the last remaining drops of revenue.
Alternatively, they are projecting reduction in advertising revenue due to recession and feel they cant take the hit the same way anymore but would have continued if everything else remained the same.
well yeah I know they are less profitable...but the newspapers make it sound like noone is buying them anymore.
Making up 10% in profit through other sources is hardly impossible, and they should have been able to recover by now if they spent a little more time thinking instead of whining
I think you mean profit, not revenue. In terms of surviving difficult economics, revenue is useless if not accompanied by profit. Cutting 33% of their workforce will at least temporarily stop an awful lot of bleeding. Long term effect, probably not good. If losing 33% doesn't hurt them long term, then they have been doing some incredibly bad hiring. They might make it to the other side of this and I know nothing about their specific situation, but judging from the history of other failures, this is sadly often the first step in a death spiral.
Who cares about the sales? The profit is anemic! This is nothing more but madness of the corporate crowd. Lot's of dumb money are swishing around looking for a safe space and the next big thing. :-/
I think what they are saying is they are not profitable with what they are currently doing and at best, they are re-evaluating their business model to try to find profitability and at worst they are going to close up shop all together.
What makes you say that? They are shutting down in a responsible and orderly fashion, so I'm willing to take it at face value that they just aren't profitable anymore.
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