American Greetings Hands Pink Slips to 1,500 Employees

Share this article:
American Greetings Corp., the nation's No. 2 greeting-card maker, will shrink its product lines, close six plants and slash 1,500 jobs, or 13 percent of its full-time employee base, after reporting a $127.7 million fourth-quarter loss yesterday.


The Cleveland company posted the loss after recording the write-down of its $33 million investment in Egreetings Network Inc., an Internet greetings service, and a one-time tax reserve of $176 million.


Rising competition from the Internet and lower-priced cards from competitors such as Hallmark Cards Inc. have forced the company to lower its fiscal 2002 earnings to between $1.10 and $1.20 a share before nonrecurring charges.


"Anticipated changes in certain contractual relationships with strategic partners related to the corporation's Internet business will result in an unexpected pre-tax, non-cash charge of about $18 million," the company said in a statement.


"The company expects these forthcoming contractual changes, coupled with recent acquisitions and organic growth that have made AmericanGreeting.com one of the top 15 most-visited Web sites in the world, to ensure that the online business reaches profitability during the fourth calendar quarter of 2001," the statement said.


Share this article:
close

Next Article in Digital Marketing

Follow us on Twitter @dmnews

Latest Jobs:

Featured Listings

More in Digital Marketing

Ramp Introduces Video Platform for Marketers

Ramp Introduces Video Platform for Marketers

The cloud-based platform syncs with marketing automation and capitalizes on user behavior to extend view times.

CMOs Who Take Charge of Digital Make More Money

CMOs Who Take Charge of Digital Make More ...

Chief marketers who usurp the CDO role earn the board's respect, as well as base salaries of $500,000 and up, says a new study.

Microsoft Set to Overtake Yahoo in Ad Revenues

Microsoft Set to Overtake Yahoo in Ad Revenues

Marissa Mayer can take credit for reversing ad declines. Still, her company will fall out of digital's Top 3 by year's end, according to eMarketer.