It won’t be a very happy holiday for some Creative Planet employees.
Just weeks after raising an additional $30 million in financing, the Los Angeles-based company said Wednesday that tough market conditions and an effort to focus more on its profitable subsids have forced it to lay off 70 staffers.
Although the belt tightening affects 20% of Creative Planet’s 300 employees, the figure is much less than the 150 reported elsewhere. In August, the company laid off 30 mostly editorial employees only days after it announced a $38 million round of financing led by TMCT Ventures.
Unlike recently pinkslipped staffers at other dot-coms, those leaving positions across Creative Planet’s various divisions will receive six weeks of severance pay, full medical benefits through Jan. 31 and pro-rated equity in the company.
Creative Planet said the move was necessary due to the shaky market conditions that have forced closures and consolidations in the high-tech sector over the past several months.
The business-to-business venture, which provides databases, and budgeting and scheduling tools for the television and film production communities, is hoping that the move helps it accelerate toward profitability by reducing operating expenses and narrowing its focus on its already successful business lines, including the Studio System, Movie Magic, the Source Maythenyi and In Hollywood, as well as the rollout of future wireless endeavors.
Creative Planet plans to launch online components for its popular software packages as early as next month. It generates revenues via subscriptions and listing fees for its databases and software offerings, and is looking to recruit more Hollywood clients — which already include Paramount and HBO — to use its offerings.
More important, the cutbacks help Creative Planet hold onto what has become hard-to-find venture capital. London-based United News & Media funneled $30 million into the company earlier this month, marking the largest single investment in the tech player(Daily Variety, Dec. 4).
“These reductions are unfortunate, but healthy and necessary given the current market climate,” said Allen DeBevoise, Creative Planet’s chairman and CEO.
“As a company we are stronger than ever, with greater operating efficiency, major customers in line and a strongly endorsed business model. We intend to lead and prosper in this new era based upon a sharp focus on our key products, great customer service and the swift realization of profitability. The best is yet to come for this company.”