NEW YORK — Launch Media has laid off 60 employees, 26% of its workforce, and will abandon plans for expansion in the U.K. and Japan, the online music portal revealed in its first-quarter earnings announcement.
But Launch also had some good news: Santa Monica-based company has inked a deal for $5 million in funding through an offering of convertible debt (convertibles are bonds that may be exchanged for shares of stock at a later date). Those funds may prove life-saving, at least for now: Launch ended the quarter with just $3.6 million in cash and marketable securities.
The layoffs will leave the Netco with 175 staffers as Launch consolidates all of its operations into its main office in Santa Monica. Details on severance packages for the departed employees were not disclosed, but a source close to the situation maintained that laid-off employees “were taken care of.”
For the first quarter of 2001, Launch’s revenues declined to $3.8 million compared with $6.4 million in the year-earlier period. Earnings before interest, taxes, depreciation and amortization for the quarter narrowed to a loss of $7.8 million from $9.2 million in the year-ago period.
Chief exec Dave Goldberg said the deteriorating ad market hurt the company’s quarterly performance. Launch derived 70% of its revenues from advertising in the first quarter, with the balance coming from content licensing.
Launch also trimmed its estimates for full-year 2001 revs to $32 million-$34 million from $45 million. The company expects pre-tax losses to come in between $11 million and $12 million, compared with a previous prediction of $10 million, but it maintained that it will have positive cash flow in the third quarter.