*Drkoop.com Cuts Staff Again Amid Management Reshuffle

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Drkoop.com, the healthcare Web site that former Surgeon General C. Everett Koop helped create, cut about one-third of its 120-employee staff this week, the second layoff at the company in four months.


The move is part of an effort to bring cash expenses down to $6.5 million for the third quarter, the company said in a statement yesterday. Drkoop.com's expenses in the second quarter were $12.8 million, down from $18.6 million in the first quarter.


With the cuts, which were announced to employees Tuesday and were effective immediately, the company's staff is down to 79 employees, said Stephanie Elsea, spokeswoman for drkoop.com, Austin, TX.


The layoffs come in the middle of a full-bore management restructuring at drkoop.com. Last week, the company announced the appointment of Ed Cespedes as president, Richard Rosenblatt as CEO and Stephen Plutsky as chief financial officer.


In addition, the company said it expected to add five new members to its board of directors, of which Koop remains chairman.


Drkoop.com cut staff across the board according to the direction the new management team wants the company to go in, Elsea said. But she referred questions about impending changes to business strategy to Cespedes and Rosenblatt, neither of whom returned phone calls seeking comment.


"They've been here 10 days. They're still looking at that," Elsea said. "They're interested in running this like a business and maximizing shareholder value."


The new managers came to drkoop.com at a time when it is trying to recover from financial trouble. The company slashed 35 percent of its workforce in May and at the end of the second quarter, on June 30, said it had only $2 million in cash.


But earlier this week, drkoop.com said it had completed $27.5 million in new financing and planned to streamline its services.
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