Ask Jeeves shows staff the door

It doesn’t sound like the Christmas party at Web information access provider Ask Jeeves Inc. is going to be very merry. The Emeryville, Calif.-based company announced on Tuesday that in order to restructure itself into two divisions, it is laying off 25 per cent of its employees and taking a fourth quarter one-time pre-tax charge of US$10 million to $12 million in order to do so.

About 180 full-time employees have lost their jobs in the hopes that by creating the separate companies, Business Solutions and Web Properties, Ask Jeeves will be able to save approximately $45 million in 2001 and grow 30 percent per year thereafter, the company said in a statement.

The move comes a week after the company announced the resignation of Chief Executive Officer Rob Wrubel, in light of its warning that fourth-quarter losses were going to be much higher than analyst expectations.

Specifically, on Dec. 7, Ask Jeeves warned of a $18 million loss, or 50 cents a share. Ask Jeeves closed trading on the Nasdaq exchange Tuesday at $3.97 per share, up 66 cents, but well below its 52-week high of $144 per share.

The company expects to reach profitability in the fourth quarter of 2001, with the Business Solutions side garnering revenue from licensing its Ask Jeeves technology and Targeting Solutions focusing on Ask.com, DirectHit.com and AJKids.com, the company said.

In a general slow-down for the dot-com economy, it has been a particularly difficult quarter for employees working at search engine companies. In September, Web portal and search engine, AltaVista Co. also cut its staff by 25 per cent, which resulted in the loss of work for 225 people.

Ask Jeeves can be reached at http://www.ask.com/.

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Jim Love, Chief Content Officer, IT World Canada

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