Reorganization, Realism, Revenue

January 24, 2002 Cuts More Staff, Positions Operations For Future Profitability

By Bridget McCrea
Inman News Features, a provider of real estate broker and agent Web sites, completed another round of staff reductions earlier this month in an effort to streamline operations and prepare for future profitability, according to Tom Orsi, president and CEO.

The new round of cutbacks leaves about 120 employees: five at the company?s Palo Alto, Calif., headquarters and the balance split evenly between its San Diego telemarketing operations and Tallahassee, Fla., engineering and customer support office, said Orsi.

"It?s nothing like the massive cutbacks that were made in October 1999 or in February 2000, when we filed for Chapter 11 (bankruptcy protection)," said Orsi. "We?re simply reducing staff in places where we don?t need people because we must be prudent about how we manage our costs."

Those leaving the company included Darin Scott, former VP of broker sales in Menlo Park, Calif., who reportedly gave several months? notice before moving on to pursue other opportunities.

Also gone are several accounting employees whose positions became redundant due to automation, three software engineers whose positions were eliminated in a reorganization and several customer service employees.

"Our customer base slipped some, so we downsized the customer service department," said Orsi. He said those staff reductions were necessary, but the company has been enhancing its customer service efforts during the reorganization.

A content acquisition specialist was let go from a temporary position in Sarasota, Fla. "From the time we reorganized, it wasn?t expected that he?d be involved for the long-term," said Orsi. "He agreed to help through the turnaround period."

Orsi expects that "turnaround period" to wind down in mid-2002, when the company anticipates exiting from bankruptcy. filed for Chapter 11 protection in March 2001 after splitting with magazine publisher Homes and Land.

"Our reorganization plan will be completed and submitted to the court in a couple of months," said Orsi. "Through it, we?ll demonstrate that we have things under control and can sustain ourselves."

Orsi wouldn?t disclose specific sales results or expectations, but he said the plan calls for a "steady revenue stream" this year.

Orsi also hinted the reorganization will be grounded in realism, not optimism.

"We?ve put together a conservative plan, though I fully expect we?ll do better than those expectations," said Orsi. "Due to the uncertainty in the economy, we?ll stay conservative with our plan." currently has more than $1 million in the bank, an accumulation Orsi called significant given that the company "started with nothing" when it filed under Chapter 11.

"Since we filed, we?ve produced positive cash from operations and we?ll continue to do that for the foreseeable future," he said.

The company didn?t renew a $1 million credit line that expired in September and reportedly had been extended by venture capital investors. "I don?t want to pay for a line of credit that we don?t need," Orsi said.

Asked how the layoffs have affected operations and morale, Orsi said those who have survived the cutbacks now know they?re doing a good job and are committed to making the company successful.

"We?ve come through the last nine months in much better shape than we thought we would," he said. "We now have management and employees who are truly committed, properly focused on the right issues and working very hard."

Copyright: Inman News Service

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