Circle.com Cuts 29 in SF Office

More changes are afoot at interactive shop Circle.com, following its integration into ad group Havas’ Euro RSCG agency division.

Baltimore-based Circle cut 29 positions, or about 6 percent of its staff, in an effort to restructure the firm “in anticipation of continued growth within the Havas advertising network,” according to a statement released by the firm.

Essentially, the cuts will position Circle to integrate with agencies under the Havas and Euro RSCG umbrellas — which includes more than 30 interactive shops and hundreds of integrated agencies worldwide.

The layoffs, which all take place at the firm’s San Francisco office, will also help Circle refocus on core competencies, executives said — away from Web design and content to concentrate on online marketing work.

“We feel this restructuring in San Francisco further strengthens our network by allowing us to focus on what that office does best,” said Circle chief executive Charlie Tarzian. “Our San Francisco office has always been a network leader in e-marketing services and solutions.”

“This initiative is part of our strategic plan to fully align Circle around our major practice areas of electronic customer relationship management, creative communications and e-channel solutions, consulting and technology implementations,” he said.

While it might be part of a larger plan, the outfit and its investors have seen their share of upheavals in recent months. In November, the company’s CEO and top financial officer both resigned under pressure from Snyder Communications, a Havas agency and a majority shareholder at the time.

Early last month, Havas brought Circle.com closer into its organization, exchanging Circle.com stock for Havas shares in a $30 million merger agreement, leaving the NASDAQ-traded CIRC as a tracking symbol.

Last quarter, the firm posted a before-charges loss of $6.8 million, on $15.7 million in revenue. It also posted a non-cash charge of $25.9 million, related to the closing of its office in Denver.

Despite the paring-down and continued quarterly losses, Tarzian said he still expects that Circle.com will contribute to Euro RSCG’s bottom line — though he didn’t say when the group would start turning a profit.

“Our action today keeps us on track to become a significant, profitable contributor to Euro RSCG Worldwide’s overall network performance,” Tarzian said. “The fundamentals of our business are strong and a string of new business wins in the first half of Q1 [including healthcare financier HPSC and others] cause us to be very optimistic about our future.”

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