U.S. Web-based marketing firm Netcentives Inc. plans to cut about 120 jobs and take other measures to realize approximately $40 million in cost savings this fiscal year. The move is expected to result in earnings per share improvements.
The Web-based marketing firm has also named its president, Eric Larsen as CEO. Larsen replaces West Shell III, who remains on as chairman.
In addition to the staff layoffs, the cost reduction plan also involves a reduction in contract labor and cuts in administrative, travel and capital expenditures, the company said.
The San Francisco-based company said it expected to report full-year revenue of $65 million to $70 million, up about 55% year-over-year, but below original forecasts. Factoring in reductions, the year-end loss per share is expected to be between 90 and 95 cents. Analysts had expected a loss of $1.63 a share, according to news reports.
Netcentives attributed the forecast change to the broad economic slowdown. In addition, the company said it has seen changes in its business activity with Nortel Networks, a significant contributor to the company's earnings.
Netcentives expects to post a $700,000 one-time charge in the second quarter related to severance costs.
