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Ziff-Davis restructures
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October 8, 1998: 10:12 a.m. ET
Computer industry media firm to cut work force, take $50M-$60M charge
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NEW YORK (CNNfn) - Delays and lower demand in Asia have forced Internet media company Ziff-Davis Inc. to restructure its operations, slash its work force and lower its earnings forecasts for the fourth quarter.
Ziff-Davis' Chief Financial Officer Tim O'Brien said the company will take a one-time pre-tax hit of $50 million to $60 million dollars during the fourth quarter because of the changes.
"While quarter results will be in line with expectations, we do not see the previously expected recovery in the fourth quarter," said O'Brien. He predicted revenues for the third quarter to be about $225 million.
Ziff-Davis' restructuring will reduce its workforce by approximately 10 percent.
Other casualties of the restructuring will include three of its publications, which will be discontinued. These include:
- Internet Business, a magazine devoted to Internet solutions to business problems.
- Equip, a magazine detailing developments in the electronics equipment industry.
- Windows Pro, a computer magazine geared toward professionals working with Windows NT technology.
Ziff-Davis said instead they will focus on their core brands, including such lead publications as PC Magazine and PC Week, its trade show division, Comdex, and its ZDNet technology website.
Additionally, Ziff-Davis announced it will file a registration statement to issue a new class of common stock which will track the value of the company's Internet business, ZDNet. About 20 percent of this stock will be publicly sold, with Ziff-Davis keeping the rest.
Ziff-Davis (ZD), based in New York City, earlier this summer launched ZDTV, a cable channel and Web site delivering programming about computers and the Internet.
CFO O'Brien predicted his company faced continuing margin pressure, industry product delays, lower Asian demand and Year 2000 transition challenges and said these played a part in the decision to restructure.
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ZDNet
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