Loudeye Reduces Staff by 45 Percent
Loudeye Technologies (www.loudeye.com) announced a restructuring plan that would reduce its 300 person workforce by 45 percent and consolidate its four office locations under one roof.
Loudeye said the layoffs are a result of integrating its recent acquisitions. The company said it's moving to exploit is digital music archive and related distribution technology, and support new business initiatives that directly enable the authorized delivery of digital music.
The restructuring is anticipated to produce annualized cash savings of approximately $12 million. Loudeye expects to record a cash charge of approximately $2.5 million in the second quarter related to these changes.
This announcement comes one week after the company acquired the assets of OnAir Networks' radio technology and infrastructure. Earlier this year, Loudeye acquired DiscoverMusic.com, a provider of music samples to leading online retailers like Sam Goody, Amazon and Barnes and Noble.
John Shaw, VP of corporate communications stated that while the acquisitions did lead to redundancies, the cuts came across the board from both DiscoverMusic and Loudeye. He indicated that the company had completed much of its technological build-out in the areas of digital music and its fundamental distribution system, relieving the need for staff with certain skill sets.
According to Shaw the company was not restructuring to fulfill short-term cash needs, but to realign its staffing needs in order to be properly equipped to move forward.
This is the second round of cuts for Loudeye this year, having cut about 18 percent of its staff in January, a move which was expected to save approximately $3 million a year.
This morning, the announcement caused a small jump in Loudeye's stock, but the price settled back down to $0.76 soon afterwards.