United Online Cuts 5 Percent Of Its Workforce


Updated: United Online (NSDQ: UNTD) is cutting five percent of its workforce — or about 96 jobs. The company disclosed the layoffs during an earnings call Wednesday, in which executives said the company was making the cuts to “increase efficiency.” Most of the layoffs are at United Online’s Classmates Media unit Classmates.com unit, which includes its Classmates.com social networking site, where the company said it was cutting 71 employees or about 17 percent of the total staff. Another 25 jobs are being cut at United’s communications business, which includes internet access providers NetZero and Juno.

It’s the second big round of job cuts at the company Classmates.com in less than a year; last December, United Online also completed a “large round” of layoffs at the site. However, during the call, CEO Mark Goldston repeatedly said that the Classmates.com business was improving, noting that churn among subscribers who pay to access the social network was at an all-time low. Revenue at the unit was flat year-over-year, with an increase in services revenue offsetting a drop in ad revenue. Executives said that they were putting in place “new automated systems,” which had led to “some things (being) rationalized.”

Overall, United Online’s revenue increased 28 percent to $216.2 million, while its net income dropped two percent to $14.9 million. Both figures were above analysts’ expectations.

The job cuts at Classmates Classmates.com were first reported by Seattle-area tech news site TechFlash.

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