Buy.com continues cut backs, sues PGA

Internet superstore buy.com made another move to rein in its business by laying off 125 workers from its Aliso Viejo, Calif., headquarters. The layoffs were across the board. The layoffs and reductions in outsourced services will reduce the company`s expenses by $29 million per year. Earlier this year buy.com laid off 25 employees, put its U.K. operation on the selling block and closed its Canadian operations. Buy.com said there are no other layoffs planned. Additionally, buy.com is narrowing its offering to focus on consumer electronics. Part of this narrowing involved closing its sports store and exiting the golf business. Because it owns no inventory, closing the sports shop is only a matter of removing links from the web site, the company says.

But leaving the golf business includes more than closing its sports store. The company filed suit in California against the Professional Golf Association alleging the PGA violated a sponsorship agreement when it entered an agreement with USA Networks. Buy.com is seeking $45 million in damages from PGA. The retailer is also taking steps to rescind a 5-year sponsorship agreement with PGA that was signed in 1999. The 5-year deal is a component of the sponsorship agreement that made buy.com the official sponsor of the PGA Tour. The deal with PGA cost buy.com $42.5 million over the life of the deal.

The Associated Press reported a PGA official as saying the association has met all its contract obligations to buy.com and that buy.com filed the suit as a way to trim more costs.