Medscape Cuts 100 Jobs, Explores Restructuring Options Amid Declining Cash Reserves
Citing lower-than-expected revenues and declining cash reserves, the online health record company Medscape on Friday eliminated 100 jobs -- more than one-fifth of its employees -- and announced that it was exploring other cash-generating options, including selling the company, the Portland Oregonian reports. Medscape began the year with $53.4 million in cash and short-term investments, but that amount had declined to $18 million by June 30. The Oregonian reports that the company became "one of the nation's biggest eHealth players" last year when it merged with software manufacturer MedicaLogic, giving the combined company 1,100 employees in Portland, San Francisco, New York, Houston and Nashville, Tenn. But effective Friday, Medscape cut 50 jobs in Portland and 50 in New York. Medscape officials say they believe that the layoffs and other restructuring steps will leave the company with funding through the first quarter of 2002. Medscape CFO Donald Bloodworth said that other cash-generating options include selling the company or spinning off its software or Internet portal unit. More than 500,000 physicians have registered to use Medscape's Internet portal, and about 12,000 use Medscape's software for patient records. Bloodworth said that the goal of restructuring is to "gain ... financial stability" to "get momentum going," particularly in sales of medical record software (Rojas-Burke, Portland Oregonian, 7/14).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.