Struggling financial news site TheStreet.com said it would shut down its UK operation, slash 20 per cent of its workforce, and dismantle a joint newsroom with the New York Times.
The company said it would shut down the UK edition because of predictions it would lose another $16 million before reaching the breakeven point.
TheStreet.co.uk site, which accounted for about $9 million of its parent company's consolidated new losses for the nine months ended 30 September 2000, will be closed immediately with the loss of 64 staff.
Thomas Clarke, chief executive of TheStreet.com, said the UK site's closure was a reflection that "the market has changed dramatically".
Clarke said in a conference call that the moves, combined with the closure of an 18-month-old joint newsroom operated with The New York Times by the end of the month, would help the company save $18 million annually. The newsroom employed seven journalists and provided news stories to both TheStreet.com and the Times' website. He said the company would record a $6 million to $8.5 million charge as a result of discontinuing those operations.
"It makes sense for us to spend a little money now to save a lot more later," Clarke said. He also said neither TheStreet.com nor its European investors were prepared to provide the additional funding to make the UK venture profitable a couple of years down the road.
Yet there is speculation that one of the investors is leading negotiations to refinance the British arm of TheStreet.com. Negotiations are thought to depend on clearing up the future plans for the operation.
The UK site, which received funding from Chase Capital Partners and Barclays Private Equity, offered financial news and commentary and had more than 180,000 registered users.
TheStreet.com said the lay-off of 40 employees would be spread across the company so as to minimise the impact on each department.
The stock of TheStreet.com has fallen more than 90 per cent from its high last May. It warned in September that revenues for the quarter would fall below expectations because of a slowdown in advertising sales and delays in implementing distribution deals.
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