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Netcentives will reduce its workforce from 345 to 180, close office in Dallas, Florida, Phoenix and New York, cut R&D spending and sell its e-mail division.
Facing continued unprofitability and a $200 million write-down of its acquisition of Post Communications, San Francisco-based Netcentives Inc. has announced a dramatic restructuring plan. The company is reducing its workforce from 345 to 180, closing its Dallas, Florida, Phoenix and New York offices and consolidating its office space in San Francisco, more aggressively collecting on accounts payable and reducing its R&D; spending. The company also has retained U.S. Bancorp Piper Jaffray to sell its e-mail business, formerly known as Post Communications.
In July, Netcentives reported revenues of $15 million during its second quarter, a 68% increase from $8.9 million reported in the second quarter of 2000. The company reported a pro forma net loss of $11.4 million vs. $15.4 million in the second quarter of 2000. But the company also said that second-quarter 2001 results excluded non-cash charges of $272.9 million. These non-cash charges include a one-time $203.7 million charge to write off a majority of goodwill and other intangible assets associated primarily with the acquisition of Post Communications. Cash burn rate in the second quarter was $15.3 million vs. $17.4 million a year earlier.