eToys Inc. has sent job elimination notices to all 293 employees at its warehouses in Blairs, VA, and Ontario, Canada. The action eliminates all of eToys' remaining staff.
In an announcement made yesterday evening, eToys, once the No. 1 online toy store, said employees will lose their jobs April 6. These cuts are over and above the 700 job cuts announced Jan. 4.
The Santa Monica, CA, retailer said it expects to have enough cash to run operations until March 31, “although there can be no assurance in this regard,” eToys said.
“In order to continue operations in 2001, the company will require an additional, substantial capital infusion,” eToys said, adding that it “does not believe that additional capital will be available to the company.”
To add salt to the wounds, New York’s Nasdaq index has threatened to delist eToys if the company does not maintain a minimum $1 bid price on its common stock in the next 90 days, or by May 2.
The Nasdaq notice said eToys’ common stock had failed to maintain the required $1 minimum threshold for 30 consecutive trading days.
An informal committee of unsecured creditors has now extended its standstill agreement with the toy retailer until Feb. 15. Under this agreement, the committee members have agreed not to collect on their debts through that date.
On its part, eToys has “agreed not to pay any past due debts and to operate under a budget designed to maintain its current operations.”
The unsecured creditors are now evaluating eToys’ assets and marketing strategy. It could recommend an out-of-court settlement between eToys and all of its creditors.
Meanwhile, Goldman, Sachs & Co., which handled eToys’ IPO, is still in the crow’s nest for a merger, asset sale, financial restructuring or any transaction that saves the online retailer from going out of business.
