*Promotions.com Slashes Staff
One of the victims of the company's downsizing, Jane Weber, the former vice president of Promotions.com Direct, said this is just a sign of the times.
"Since April, the market has caused us to pull in our belts and stop spending on marketing. We were cutting our budget as other people were cutting their budgets," she said.
The layoffs were the result of the company's streamlining from three divisions to two. Promotions.com Direct was dissolved into Webstakes.com, which will now offer all of the defunct division's services. The other surviving division is Promotions.com Custom Solutions.
"They were trying to accomplish a couple of goals to improve their business models and become profitable at the same time as the revenue started to shrink. So they did what companies do and looked to decrease their overhead," Weber said. "We had three divisions that were all supposed to thrive, two of which were very similar, so they merged the two departments and only needed one head."
Promotions.com, New York, refused to comment on the layoffs. The company did issue a release, however, stating that the reorganization would generate an annual operating cost savings of $3 million to $3.5 million.
At press time, PRMO was trading at 1 23/32, down from its 52-week high of 35. "Companies are under a lot of pressure right now, not just ours," Weber said. "When you're in a really rapid growth phase, you go into a lot of new areas. When it slows down, you have to decide if you belong in those areas."
Promotions.com is an online sweepstakes promotion company that integrates sweepstakes, contests and similar promotional events with direct marketing tools and a proprietary membership database of more than 6 million consumers.