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Company Town Lays Off Workers

Internet: Thirty of 50 Web site employees are fired, sources say. Parent company says it wants to consolidate operations.

September 27, 2000|ASHLEY DUNN | TIMES STAFF WRITER Inc., an online provider of entertainment news, reviews and show time listings, laid off most of the staff from its flagship Web site Tuesday, citing an effort to consolidate some of its operations in the company's Florida headquarters.

The Boca Raton-based company would not divulge how many people were laid off, but sources said about 30 employees out of a total of 50 were let go from the company's Web site unit in Santa Monica.

"It just didn't make sense to maintain two tech staffs," said Inc. Chief Executive Mitchell Rubenstein. "It's not necessarily a permanent reduction."

Rubenstein dismissed suggestions that the layoffs were prompted by losses at the Web site.

"That's absolutely false," he said. "We just received $3 million in funding, and we just announced that we should be cash-flow positive in the first quarter of 2001." Inc. also owns, and CinemaSource. The company was previously named Big Entertainment Inc. but adopted the name after buying the Web site in December. The parent company had about 200 employees. Inc. is partially owned by Viacom Inc. (35%) and Tribune Co. (11%), the parent of the Los Angeles Times.

In the last 12 months, Inc. has reported net sales of $17 million with losses of $41 million. On Tuesday,'s stock closed down 50 cents to $6 in Nasdaq trading. The stock has been dropping steadily since hitting a high of $24.50 in December.

Rubenstein said that when the Web site was acquired, it had a full staff of network engineers, Web designers, salespeople and executives.

"When we bought the company, it had a legal and a marketing department," Rubenstein said. "They weren't needed in our operations."

Rubenstein said he had planned to shift the technical and design work from Santa Monica to the company's Florida headquarters, which now handles much of the same work for the company's other Internet ventures.

"This is just good business sense to consolidate our operations," he said.

Rubenstein said he intends to keep about 20 staffers in Santa Monica to continue writing entertainment news.

One employee, who did not want to be identified, said the entire staff was assembled Tuesday morning and unexpectedly informed of the layoffs. The employee said the staff was told only that the cutbacks were due to unspecified financial reasons.

Employees were provided with severance pay and counseling on finding a new job.

Rubenstein said an outplacement consulting company had advised the company to break the news quickly to let employees move on with their lives.

"I don't think there is a good way to tell people they don't have a job," Rubenstein said.

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