Stay on Top of Enterprise Technology Trends
Get updates impacting your industry from our GigaOm Research Community
RealNetworks (NSDQ: RNWK) is laying off roughly 7.5 percent of its staff, about 130 people across the company, and cutting 30 contract positions and consultants, the Seattle-based company announced in an SEC filing this afternoon. From the brief filing (the legal mumbo jumbo is longer than the text): “The Company eliminated the foregoing positions to reduce operating costs in light of slowing consumer and business spending due to the current economic downturn. Notwithstanding the reduction in force, the Company expects to achieve record revenue for full year 2008.” The filing confirmed an earlier report by CNET News.
From the company blog, a positive spin on layoffs: “To put this in context, we still expect to report record revenue for the year, and as our strong balance sheet would suggest, we are well positioned to take advantage of strategic growth and investment opportunities as they arise.” Also, some compassion from the company: “Departing employees can conduct job searches for other positions at Real or elsewhere from their offices here, or, if they prefer, from home. Everyone will remain on the payroll through the end of the year, plus each will be offered a cash severance package based on their length of service. Because of the unusual and difficult economic times, these severance packages include outplacement services and six months of COBRA healthcare coverage.”
Also, in related news, the RNWK-Viacom (NYSE: VIA) online music JV Rhapsody America will not shut down its NYC offices, contrary to earlier reports this morning. The company has denied it, but there have been layoffs at the music JV, and according to News.com, they were cut from the JV’s office space at Viacom headquarters. It did do some layoffs from this division earlier in January. For the complications in this JV, read our earlier posts here and here.
Update: Bill Hankes, VP-corporate communications, tells me the cuts affect every unit but “not one more than any other.” He said the Rhapsody America layoffs were not timed with Viacom’s action and that they are included in Real’s number because it is the managing partner. He wouldn’t provide specifics but said the effort was proportional not only across divisions but from “top to bottom” with layoffs including the VP level. (None of those being laid off are executives Real is required to identify in regulatory filings.) Hankes said the decision was part of the company’s budgeting process “when you get a sense of what the cost structure looks like.” When I asked if this was the beginning or they were trying to do it all at once, he replied: “We try to be decisive about these things.”