Viant Lets Go 211 More
With revenues plunging, the Boston Web consultancy is forced to swallow a second dose of layoff news and shut three offices.
Viant Corp. of Boston today became the latest Web consultancy to swallow a second dose of layoff news, as it announced it would lay off 211 people, 38 percent of its 555 remaining workers.
Viant in December laid off 125 of 725 workers and closed a Dallas office. Today it said it would close offices in Houston, San Francisco and Munich. Layoffs are also expected in remaining branches in Atlanta, Chicago, Los Angeles, New York, the Silicon Valley and London.
The move will cost Viant between $13 million and $17 million in severance and other restructuring charges in the current quarter. Viant said it will end the quarter with $165 million in cash and cash equivalents — more than its current market valuation of $118 million.
The dot-com industry collapse has devastated the online consultancy industry. Virtually every publicly traded player has seen revenues dwindle, share prices plummet and layoffs result. With dot-com customers bankrupt, consultants are racing to replace income by convincing Fortune 2000 companies to put business processes online.
Once high-flying firms like AnswerThink, MarchFirst and Zefer have all endured multiple layoff rounds. Now Viant joins them.
The Boston company said revenue for the quarter ending in March would be between $14 million and $16 million, about a 40 percent plunge from the fourth quarter, when the company failed to meet downwardly revised estimates by taking in $25 million.
Overall Viant made $127 million in revenue in 2000, with losses of $2.5 million, or 5 cents a share. In 1999 it made a modest $1.4 million profit on income of $61.3 million — about the level of revenue it expects to take in during the current quarter.
Viant said it would lose between 33 and 36 cents per share in the first quarter. A dozen analysts polled by First Call/Thomson Financial had predicted a 20 cent per-share loss. The losses do not include the restructuring charges.
The company also said Sherwin Uretsky, its chief business development officer who had been with Viant for more than three years, has resigned “to pursue other interests.”
Viant also said its board has adopted a shareholder rights plan “to assure stockholders fair value in the event of a future unsolicited business combination or similar transaction involving the company.”
Analysts have for some months been anticipating the acquisitions of struggling consultancies and the consolidation of the entire industry. Viant said the plan “was not adopted in response to any attempt to acquire the company.”
Under the plan, Viant will issue a dividend of one right for each share of its common stock held as of April 30. Each right will entitle stockholders to purchase a fractional share of the Company’s preferred stock for $21.75.
The rights will become exercisable only if a person or group announces its intention to acquire 15 percent or more of Viant stock. If that occurs, holders can exercise the rights for shares with a value of the twice the right’s then-current exercise price.
In midday trading Tuesday VIAN, which over the past year has traded between 2.219 and 42.688, was down 0.125, or 5 percent, at 2.3125.
