Citing depressed response rates because of economic conditions, membership club marketing company MemberWorks cut 225 employees yesterday and reduced its revenue projections for the fiscal year 2002 by about $100 million.
The layoffs, representing a 15 percent reduction in MemberWorks' staff, were expected to save the company $9 million annually. MemberWorks also said it would close its United Kingdom operation, reduce the capacity of its call centers and downsize infrastructure, incurring a one-time restructuring charge of $7 million in the quarter ending Dec. 31.
Cost-reduction efforts were being made in light of “increasing uncertainty in both the U.S. and abroad,” the company said. President/CEO Gary Johnson said the structural changes to the company would give MemberWorks greater flexibility to adjust to the changing market.
MemberWorks, which will end its current fiscal year 2002 on June 30, said its projected revenues for fiscal 2002 have been reduced from earlier forecasts of $521 million down to between $420 million and $430 million. Revenues for fiscal 2002 are expected to be 3 percent lower than the previous fiscal year.
MemberWorks said it would report its financial results from the quarter that ended Sept. 30 on Oct. 25. Revenues for the quarter are expected to be $118 million to $120 million.
