In an ironic consolidation move, Hollywood.com is sending much of its operations away from Hollywood.
The movie-info Web venture pinkslipped a majority of its employees Tuesday as the parent company of the site has decided to hand over management of it to staffers in its Boca Raton, Fla., headquarters.
Execs with the Netco would not confirm the number of people laid off, but sources inside the company said the staff was reduced from 50 employees to 12.
Hollywood.com also operates MovieTickets.com as well as business sites HollywoodPro, EventSource and CinemaSource. News of the layoffs came after the market closed Monday. Shares of Hollywood.com fell more than 7% on the Nasdaq to $6.
“In many of the cases, the technology can now do what the people used to do,” Rubenstein said. “Our goal was not to reduce staff but to improve the productivity of the site.”
Documents filed with the Securities & Exchange Commission show that financial losses at Hollywood.com Inc. have increased in recent quarters. For the six months ended June 30, the company showed a net loss of $20.9 million, compared to a net loss of $4.4 million for the same period in 1999. Revenues rose to $9.9 million from $3 million in the year earlier period.
In January, Hollywood.com entered into a seven-year promotional agreement with CBS that gave the Netco $100 million in advertising and $5.3 million in cash; in exchange, the Eye received a 30% interest in the company. In March, CBS acquired another 5% by giving the dot-com an additional $5 million in advertising and $5 million in cash.
Rubenstein said Hollywood.com is also seeing revenue from the launch of Broadway.com, which has been profitable since its bow in May. Netizens can purchase theater tickets online and access legit reviews and show times.
“Looking at the profits, we figured we should emulate Broadway.com,” Rubenstein said.