Spike Networks has axed more than 30 jobs in an effort to stem over blown operating costs. The cuts have seen 10-12 staff cut from the Sydney operation and 20 in the US, with the resource-intensive SpikeRadio sustaining the biggest blows.
John Craven, Spike CyberWorks' chief executive, said the cuts are the result of a general tightening, but should be assessed as two separate entities, the Australian operation Spike CyberWorks, a 30/70 split ownership between Pacific Century CyberWorks and Spike respectively, and the US-based Spike Inc, which includes SpikeRadio.
"I have done some pretty normal restructuring of the business here, taken some inefficiencies out of the skills double-ups," said Craven. "Looking at the size of the market and the number of people we have - there is quite a lot of capacity here with a team of about 120-130 staff. That's a pretty big operation, especially by Australian standards."
"The restructuring wasn't a mass exodus. It's part of a sensible program that will get us back to a position where we can break even." On current projections, Carven said CyberWorks should be cash positive by June 2001.
Most of Spike's cash outflow is occurring through SpikeRadio in Los Angeles which sustained $15.2 million losses in the 12 months to 30 June, 2000. Re-scaling of business operations and automation of delivery processes is expected to turn this around by December 1 this year.
Recent cashflow details released by Spike for the September quarter, which put its cash reserves at $5.2 million, did not include results for the Spike CyberWorks arm due to ASX regulations. However, CyberWorks issued a statement to the ASX saying it held a further $5.1 million in cash and has increased its revenues 106 per cent in the three months leading up to September compared to the corresponding period last year.