Chinadotcom slashes 600 jobs

Chinadotcom CEO Peter Yip as company President Ian Henry looks on.

By CNN's Andrew Demaria

HONG KONG, China (CNN) -- Internet firm chinadotcom has said it will axe 600 jobs by July in an effort to save an expected U.S. $50 million a year.

The cuts are in addition to 400 layoffs announced in March.

Chinadotcom corporation says the cuts, representing 60 percent of total costs, were a rescaling of its business in a bid to become the first major Internet company in Asia to achieve a break even performance.

"We have been making connections since last year to align our costs, but these moves are much bolder and more aggressive to get us to break even as soon as possible," chinadotcom chief executive officer Peter Yip said in a statement.

Chinadotcom operates Internet portals and offers e-business and e-marketing services. The company has offices throughout Asia including, Japan, Korea, Australia, China, Hong Kong, Taiwan, Singapore and Thailand.

Reductions across the board

The latest layoffs will reduce chinadotcom's staff to 1,500 from 2,400 at the end of last year, a cut of 37 percent.

The company says that staff reductions will be made across the board including a streamlining of its Hong Kong headquarters and a reduction in marketing spending.

"Through this rescaling we expect to realize savings of over U.S.$50 million annualized, said chief financial officer Daniel Widdicome in a statement.

"Given the current and projected Internet economy, we need to create a healthier size and structure to capitalize on the changed competitive landscape both from an operational and an acquisition standpoint."

Chinadotcom reported a 5.7 percent drop in revenue in the three months to December last year to U.S.$34.4 million, the South China Morning Post reported Saturday.

Internet companies worldwide have been enduring lower than expected revenues for the past year mainly as a flow on for the huge slump in the tech sector on world markets.

The company announced it would close it's advertising networking business in Japan and concentrate more on China, which it believes is a key growth market.

As part of the restructuring announcements, board chairman Raymond Ch'ien has been appointed as executive chairman.

chinadotcom

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