Dot-Coms' Shrinking Life Expectancy: Pets, Layoffs, and Financial Turmoil

Strategic Insights -

As online pet stores struggle to stay afloat, the life expectancy of dot-coms continues to dwindle. In a desperate bid to secure funding or find a new home, Petopia.com has cut 60 percent of its staff, or 120 people, while Theglobe.com has reduced its workforce by 41 percent and spun off two of its properties. These cuts come on the heels of a tough quarter for Theglobe.com, which reported a net loss of $10.3 million. Theglobe.com's CEO, Chuck Peck, attributed the challenges to investors' disillusionment with dot-coms, while Petopia.com's vice president, Donnelle Koselka, noted that the company was "months away from turning a profit" before its funding deal fell through.

Key Takeaways:

  • Petopia.com has cut 60 percent of its staff, or 120 people, in an effort to stay afloat.
  • Theglobe.com has reduced its workforce by 41 percent and spun off two of its properties.
  • Theglobe.com reported a net loss of $10.3 million in its third quarter earnings report.
  • The recent job cuts at Petopia.com and Theglobe.com are among a larger number of dot-com reductions for the month of October.
  • Challenger, Gray & Christmas reported that Internet companies laid off 5,677 employees from October 1 to October 20, compared to 4,805 in September.
  • Petopia.com's office, designed as a "pet paradise," will adopt out its various pets, including birds, hamsters, fish, chinchillas, guinea pigs, and lizards.
  • Theglobe.com's sale of its UK-based games unit will generate $6 million in savings.

Statistics:

  • 5,677 employees were laid off by Internet companies from October 1 to October 20, according to Challenger, Gray & Christmas.
  • 4,805 employees were laid off in September, compared to 5,677 in October.
  • Theglobe.com's net loss in the third quarter was $10.3 million.
  • Theglobe.com's net loss per share was 33 cents, compared to a loss of 29 cents per share in the year-ago quarter.
  • Petopia.com's staff cut amount to 60 percent of its total staff.
  • Theglobe.com's layoffs resulted in a $13.5 million savings.
  • Theglobe.com reported a one-time merger cost of $6.3 million in the third quarter.

Sources:

  • "Petopia.com Makes Cutbacks, Theglobe.com's Q3 Loss Widens" by Newsbytes.com (http://www.newsbytes.com)
  • Challenger, Gray & Christmas's report on dot-com layoffs (no date provided)
  • Petopia.com's website (http://www.petopia.com)
  • Theglobe.com's website (http://www.theglobe.com)