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DoubleClick cuts 150 jobs
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December 5, 2000: 12:23 p.m. ET
Internet ad firm trims staff 7% as it struggles with dot.com shakeout
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NEW YORK (CNNfn) - Reeling from cutbacks at dot.com companies, Internet advertising agency DoubleClick laid off about 150 employees, or 7 percent of its work force, industry sources confirmed Tuesday.
The cuts, which came Monday, reflect slower growth in online ad spending by Internet companies, which have become cash strapped and are struggling to come up with sustainable business models for the Web.
Jeffrey Epstein, DoubleClick's executive vice president, confirmed the cuts at the UBS Warburg Media Conference in New York Tuesday, saying "We expect a continued period of soft near-term ad demand," according to Reuters.
Epstien declined to say how many jobs will be cut at the New York-based company, but said the reductions restore the company to its June 2000 employment level. The company had employed about 1,980 at the end of the second quarter in June before growing to 2,100 or more by the end of the third quarter in September, Reuters reported.
DoubleClick (DCLK: Research, Estimates) shares jumped at the news, gaining $1.19, or nearly 10 percent, to $13.19 in midday trading Tuesday. But that's far off the stock's 52-week high of $135.25 a share.
In a brief statement Monday that left out the details, the company said,
 "Recently we announced that we were aligning our executive team to meet the needs of our global clients. Today we have made further changes to the organization to better align under those leaders. We have always carefully managed headcount to assure our productivity outpaces our competitors... The changes made today leave our employee base virtually flat over the course of the second half of the year."
Sources said the cuts came from more than one division, but declined to say which ones, and that the company still is hiring in the areas of research, data and emerging markets.
Last month, a record 8,789 dot.com jobs were cut, 55 percent more than in October, according to consulting firm Challenger Gray and Christmas.
Nevertheless, Eric Hansen, an analyst with Dain Rauscher Wessels, remains optimistic about DoubleClicks's future, saying it has plenty of cash on hand to survive the dot.com shakeout.
"This is a cash flow positive company. Right now their customers, advertisers and publishers are having a hard time, and if too many of them collapse it could be a problem, but I think some of these guys [Web companies] are going to figure it out," said Hansen, who maintains a "buy" rating on the company. "I'm absolutely convinced over the long term this is going to work."
In addition, Merrill Lynch issued a research note Tuesday saying it believes ad industry forecasts for Internet spending growth of between 40% and 70% are too aggressive, but that the investment firm remains encouraged by their optimism.
"We continue to believe the onine ad environment will remain lousy through Q1 as a result of the ongoing dot.com shakeout. We belive Q1 will be the toughest quarter, with only 10 percdent year-over-year growth," the company said. "After that, we believe growth will accelerate through the year, as traditional advertisers pick up dot.com slack." 
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DoubleClick
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