Razorfish Loses European Executives

The thinning-down continues at interactive consultancy Razorfish, which lost two top executives this month from its European operations, and another from its UK office.

A spokesperson for the New York-based company confirmed that Mike Beeston and Mark Curtis had both resigned from the company’s embattled London office. Both had been members of Razorfish’s European management team; Beeston served as strategic development director, while Curtis had been executive vice president for skills and practice.

A spokesperson for Razorfish said that Niel Croft, director of strategy at Razorfish U.K., also resigned; however, that departure “was in no way related to Mark and Mike’s.” The spokesperson declined to say how Beeston and Curtis’ departures were “related” and didn’t explain the reasoning behind their departure. Neither could be reached for comment by press time.

The two joined Razorfish at the same time, in 1998, when the New York-based company acquired Curtis Hoy Beston Interactive, a London interactive shop they had help found three years earlier.

CHBI had been widely regarded as one of the U.K.’s top interactive agencies. At the time of the acquisition, CHBI’s executives said aligning with Razorfish’s international network would allow them to better serve an increasingly global client base. On the other hand, Razorfish chief executive and chairman Jeff Dachis cited the company’s “world class talent” as a reason for the purchase.

“We are saddened by the departure of Mike and Mark,” said Razorfish Europe executive vice president Michael Moore in a statement. “They have both made a significant contribution to every part of life at Razorfish and we wish them every success for the future.”

The news comes on the heels of a “voluntary termination” program in several branch offices, including London. The company has not disclosed how many accepted the offer of an enhanced severance package, though a Razorfish spokesperson said Curtis and Beeston’s resignations were not part of that headcount reduction effort.

Despite the departures, Moore remained upbeat about the company’s prospect in the region.

“We are excited by the opportunities that are emerging as a result of the changes within the e-business sector and are confident that with our tight team of highly talented individuals and strong leadership we will continue to lead and innovate,” he said.

While that team is becoming even tighter on an executive level, Razorfish also faces problems associated with a bloated organization.

Razorfish either needs to find a way to slim down its non-managerial staff, or to bulk up in new business. As of its last quarter, the company said personnel utilization rates had hovered above the 30 percent mark, though it said it is targeting levels of 65 to 70 percent in 2001.

That was the reason for company-wide layoffs in February, which saw the departure of about 400 employees, or roughly 20 percent of its global staff.

However, with the outlook for Web design and interactive work generally negative for the next several quarters at least, it’s uncertain whether Razorfish — which posted its first loss last quarter — will have to resort to additional means to shave costs until revenues rise again.

The news of Curtis’ and Beeston’s resignations also smacks of another executive departure in the not-too-distant past. In August, Razorfish lost Michael Pehl, who had worked for the company since it purchased his Massachusetts-based systems integrator iCube, in 1999.

The iCube acquisition had been hailed as a way for Razorfish to leverage its front-end design and implementation skills — and client roster — into lucrative back-end integration. But at the time of Pehl’s departure, analysts from Deutsche Bank Alex.Brown — which cut Razorfish’s rating from Strong Buy to Buy — cited uncertainty surrounding Razorfish’s future management structure.