Xchange Inc., Boston, has laid off 15% of its work staff, or roughly 72 employees, across its North American operations. The cuts were made in a variety of functions, including development, professional services and general administrative jobs, but there were “virtually none” among the Boston-based firm’s sales staff.
The staff reductions, which were effective immediately, left the company with around 420 employees. Roughly 15 of the 72 were transferred to Carreker Corp., a provider of online services for the financial industry that has a strategic relationship with Xchange.
Xchange president and CEO Andrew J. Frawley told DIRECT Newsline that the staff reductions “while painful, were part of our commitment to be profitable in the fourth quarter of this year.”
The company’s overseas operations were largely spared because, according to Frawley, the company has not seen the same type of economic tightening in foreign markets and “the international operations were leaner to begin with.”
The layoffs were announced on the same day Xchange, which had until recently been known as Exchange Applications Inc., said it would take a $6.9 million loss, compared to $1.7 million in net income during the first quarter of 2000. The company’s revenue, which had been $15.2 million a year ago, was $15.8 million for the most recent quarter, which ended March 31.
Much of the loss can be attributed to increases in sales and marketing expenses, which more than doubled from $4.8 million a year ago to $10.3 million, and research and development costs, which jumped from $3.2 million a year ago to $6.2 million in the quarter just ended.
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