NORWALK, Conn. -- Priceline.com eliminated 48 positions, about 11% of
its workforce, "indefinitely postponed" several previously
announced business initiatives, and scuttled plans to expand into
Japan.
In a statement Thursday, the company said the moves will enable
it to refocus on building its travel business.
Priceline.com, the name-your-own price distressed inventory
site, will continue to feature airline tickets, hotel rooms,
rental-cars, home finance, long distance telephone service and new
cars. The company indicated that it will not go forward with
planned business-to-business, term life insurance and cellular
telephone services.
In addition, Priceline.com said it ended discussions with
Softbank E-Commerce Corp. to launch the Priceline.com model in
Japan.
"The steps taken today will relieve the company of the
significant financial and operational burdens of launching these
new businesses and are part of a broader program to build
Priceline.com's momentum," the company said. "This includes
focusing principally on strengthening Priceline.com's travel
business through new marketing programs, improving business
processes, enhancing its Web site and improving customer
service."
Priceline spokesman Brian Ek said the cancelled initiatives were
all in the "drawing board" stage."
The company did have employees in place working on these
initiatives, so many of the job cuts -- which were all from
positions in Connecticut -- "were associated with these
drawing-board products," Ek said. Priceline.com will incur a charge
for this restructing in its fourth quarter, he said.
Ek added that the job trims will not impact current
operations.
Forrester Research senior analyst Henry Harteveldt said
Priceline.com's decision to focus on its core businesses make
sense.
"Priceline needs to focus on high-volume, commodity items with
limited shelf life whose delivery can be accommodated solely
on-line," he said.
Priceline.com's stock price has plummeted in light of
disappointing third quarter earnings and adverse publicity about
its customer-service record. The WebHouse Club, a Priceline.com
licensee that sold groceries and gas, recently discontinued
operations.