WEBMD: Company Lays Off 1,100 to Streamline
Hoping to streamline its operations, WebMD Corp. will cut 1,100 jobs, merge offices and data centers, and reduce marketing, the Wall Street Journal reports. The announcement comes less than three weeks after the company completed three major acquisitions, including the purchase of Medical Manager and its Internet subsidiary CareInsite. Although the restructuring will cost WebMD $35 million to $45 million in the third quarter, the moves are expected to save the corporation $250 million by the end of next year and to help it "focus on its core business of providing automated health care transactions and services to doctors and health care institutions, and providing health information to doctors and patients via the Internet," Co-CEOs Martin Wygod and Jeff Arnold explained. They noted that job layoffs will happen "across the board," including cuts in marketing, sales, operations and programming personnel. Goldman Sachs analyst Stephen Savas said, "They've got a seasoned management team now and this is a very good step in the right direction." But he added, "There's just another one thousand steps to go." WebMD is also selling its Porex plastics company -- part of Medical Manager -- and considering whether to "modify or terminate" some six to eight "business relationships" (Carrns, Wall Street Journal, 9/29). The Los Angeles Times notes that the job cutback, nearly 20% of WebMD's workforce, is "perhaps the largest single 'dot-com' layoff to date" (Los Angeles Times, 9/29).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.