Dwindling Crews Try to Keep Dot-Com Visions Alive

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These days, the term “dot-com” often turns up in the same sentence with “out of cash,” “layoffs” and that blunt four-letter “bust.” But in recent weeks, a number of dot-coms have entered another realm, far from boomland but not quite bust. It’s a kind of dot-com limbo, where future funding is uncertain but the plug hasn’t been pulled, where stout-hearted skeleton crews show up daily to keep the life-support systems going. In cramped quarters, on tightened budgets, these truncated staffs do the dot-com dirty work that, they hope, will bring their companies back from troubled waters and onto the promised shores of profitability. Just about the only commodity not in short supply at many such shops are the memories of those heady times not so long ago. “We were all friends,” said Richard Horrmann, general manager of Hollywood.com Inc., an online entertainment portal that unloaded 35 of 50 people from its office in Santa Monica in late September. “We considered everyone to be part of our family.”

Nevertheless, the business was inefficient, according to Hollywood.com CEO Mitchell Rubenstein. In a move that is quickly becoming an established pattern in the dot-com world, Rubenstein and the Hollywood.com board decided to “rightsize” the staff to maintain profitability. Cuts were to be made across the board at Hollywood.com and its sister sites: Broadway.com, MusicSite.com and MovieTickets .com. Likewise with personnel at the Hollywood.com Studio Store. But in the end, Hollywood.com’s Santa Monica operation was the hardest hit. Only 10 percent of the company’s total staff was laid off, but all of those cuts came at the Santa Monica office. All of the Santa Monica office’s technical staff was let go, and those operations were consolidated at the Hollywood.com headquarters in Boca Raton, Fla. A trimmed-down editorial staff is all that is left behind in Santa Monica. “We had a significant amount of duplication between our office in Santa Monica and our headquarters in Boca Raton,” explained Rubenstein. Consolidation became necessary. Therefore, we did it reluctantly in order to benefit the company and the remaining employees on a long-term basis.” The consolidation and layoffs will save Hollywood.com an estimated $300,000 a month, primarily in labor and rent, Rubenstein said. Said Hollywood.com publicist Maureen Squillace: “In order to be thriving, you have to be a lean machine.”


Lean and, today, quieter

At one time, Hollywood.com’s posh office at the Water Garden office complex had a family atmosphere. “It’s a loss of really wonderful people,” said one of the 15 employees who managed to hold on to their jobs. “I’m in a state of denial because I keep thinking 25 people are going to show up for work.” Actually, 35 people from the Santa Monica office were laid off. While it is still a busy newsroom that generates fresh Hollywood entertainment news and information, the office does not have the hustle and bustle it once had. “It’s a different vibe,” Horrmann said. “It’s so much quieter,” said the employee left behind, who spoke on condition of anonymity. “I’m still dealing with the change.” One way in which she and her co-workers are dealing with the change is by ramping up their efforts. “We know why we’re here, and we know what we have to do: We have to be the dream team,” she said. “Each of us represents three people. We have to work together perfectly.” They also have to be more intimate. The employees who are left were moved en masse into a small portion of the old office to reduce rent. While the office is quieter – 35 fewer voices and ringing phones – it is, in a sense, more tightly knit. “The suite used to be so big, and we were all so spread out,” the employee said. “Now that we’re all physically in the same area, there’s more of a flow of communication. Now, the work we do will be a clearer reflection of us. We’ll see an individual’s impact.” At the time of the layoffs, Hollywood.com’s stock was trading at its 52-week low of $5.38 a share. That is down from its 52-week high of $24.50 last December. Last week, the stock was holding steady at about $7 a share. Rubenstein set a goal of Hollywood.com becoming “cash flow-positive” by the first quarter of 2001. A daunting goal? Not to Horrmann or his staff. “We realize we have a job to do, and we’re committed to it,” Horrmann said. “A lot of Web sites have simply had the plug pulled on them. We don’t want to be that way. This is a talented staff that has rallied.” “We’re ready for the challenge,” the employee said. “(The downsizing) was unfortunate, but I also realize that it had to happen. If it was my company, I would have done the same thing.” Rubenstein wouldn’t say if further cuts would be made at the Santa Monica office if Hollywood.com doesn’t break into the black in six months, but he did say the Web site can’t exist without a news bureau in Los Angeles. Also, Rubenstein hired an outplacement firm to help the laid-off employees find new jobs. In many cases, the outgoing employees have gone to higher-paying jobs, Rubenstein said.

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