In an effort to further reduce its cash-burn rates, Internet conglomerate ehyou.com has made around one third of its staff (approximately 20 people) redundant.ehyou.com runs a Web hosting and consultancy business, an online credit-risk monitoring service, and several online music businesses including mp3.com.au. Like many of its peers, the company has been forced to consolidate to please an anxious investment community.
"Its important to look at the good news," said ehyou.com chief executive officer Domenic Carosa. "You can say its bad news because of the retrenchments, but you can also say we'll be saving $100,000 a month or $1.2 million a year."
Carosa said the jobs were cut across the board and staff were given "generous redundancy pay-outs". The move is part of his commitment to reducing the company's cash-burn rates. "Ever since May our cash-burn has been decreasing quarter by quarter and our revenues have been increasing quarter by quarter," he said. "Like everyone else in the industry, one has to change with the times. At least we're making changes while we've still got money in the bank."
Carosa claims the company still has $8.5 million in funding and is determined it will remain financially responsible. However, the consolidation will not result in the scaling back of the company's acquisition strategy.
"We have made two acquisitions of cash-flow positive businesses in the last six months and this will continue," he said.
Carosa said the company will now focus more of its resources on its B2B business units, such as Web development and hosting, in order to generate higher revenues.