CNET Announces 10 Percent Workforce Reduction

Posted on July 5, 2002

CNET Networks, Inc., a provider of technology information and services, announced a 10-percent reduction from its current workforce of approximately 1,900 -- about 190 jobs. CNET said it is aligning its organization around six key business categories including business technology, commerce, downloads, gaming, international and channel. CNET has been struggling and its stock price has recently fallen under $2 per share.

"Over the past year, we have taken a series of steps to simplify our business model and reduce our cost structure as we align around our long-term business objectives, and continue toward our revenue growth and profitability goals," said Shelby Bonnie, chairman and chief executive officer of CNET Networks. "The move will enable us to provide the most innovative service to our customers, as we continue to aggressively target operating profitability in the second half of this year and position our business for significant growth as the technology and advertising markets improve."

CNET Networks also announced revised financial guidance for the second quarter of 2002. The company expects to report second quarter revenue of between $57 million and $58 million, compared to its previous guidance of $58 million to $63 million, and an operating loss before depreciation and amortization of between $15 million and $17 million, which includes approximately $7.0 million to $8.0 million of business realignment expenses consisting of severance payments ($4.5 million to $5.5 million), a real estate abandonment charge ($2.0 million) and contract termination costs ($0.5 million).