'Net arm pinkslips 105 staffers, drops IPO idea
The disastrous month for dot-coms continues.
Viacom’s MTVi, the online arm for the MTV Networks, pinkslipped 105 employees as part of a reorganization. Before the layoffs, MTVi employed more than 400 staffers.
Layoffs will take place across the board. The editorial and tech departments will be cut back to consolidate operations, with plans to “create a centralized news organization” for their sites, according to an MTVi spokesman.
“We recently had three separate reviews for the new ‘Nelly’ album,” the spokesperson said. “Clearly there were places where we could be running more efficiently.”
The holding company’s marketing efforts will be “decentralized” and folded back into MTV Networks’ primary channels, MTV and VH1.
Despite recent rumors to the contrary, MTVi will remain a separate division and will continue to receive $100 million worth of promotions on the MTV stations until July 2004.
“The Internet is still a priority with this company,” the spokesman said. “Having a separate Internet team is critical to us.”
Company said the reorganization will bring the online arm closer to the cable station’s programming, facilitating the development of new shows that combine Web and TV.
MTVi was formed in August 1999 to oversee the efforts of MTV.com., VH1.com and music site SonicNet. Company also oversees Country.com, which recently came under their umbrella with the acquisition of CBS in May.
Despite the well-known brand names and respectable viewer numbers, MTVi has experienced problems common to dot-coms. Company was losing money and was unclear on exactly when the company might prove profitable. Also, several top-level staffers have ankled in the past six months.
Like most startups, MTVi has burned through some substantial funds. In 1999, the company reported revenues of $18.2 million and a net loss of $46.4 million.
MTVi, which filed an intent for an IPO in February, has since cooled to the idea.
“We have no plans to move forward with an IPO,” the spokesman said. “We feel that we wouldn’t get our full value from investors right now.”