Razorfish, the digital agency that laid off 43 staff from its London office last week, has blamed the collapse of small business portal Work24 for some of the cutbacks, as its demise scuppered a pounds 3m contract.
Razorfish was hired in November to develop Work24 into a number of vertical sites, or vortals, serving particular industries. But the project lay in tatters after the portal's joint owners ScottishPower and Royal Bank of Scotland pulled the plug on the venture at the start of the month.
'We'd just hired Razorfish for the next phase of the site, which involved deeper content organised into vortals. We had six of these lined up,' said Steve Ross, former managing director at Work24. 'The project was worth between pounds 2.5m and pounds 3m to Razorfish.'
Mike Beeston, European strategic development director at Razorfish, said: 'Our first quarter position and revenue forecasts weren't sufficient for us to sustain the level of costs we had. The company could not afford to maintain its headcount.' He added that there were just under 100 job casualties across Europe.
The job losses formed part of a worldwide cull of 400 staff and came against a backdrop of disappointing financial results for the final three months of 2000.
The company, headquartered in the US, last week announced its first quarterly loss in its five-year history. It lost dollars 19.8m (pounds 13.7m) over the quarter, compared to a dollars 5.8m (pounds 4m) profit over the same period last year. Global revenues fell five per cent to dollars 52.7m (pounds 36.5m).
The job losses followed last October's announcement by Razorfish of a performance improvement plan, which aims to streamline the business. It axed 10 per cent of its global workforce back then.
The company has confirmed its realignment of staff skills into four areas: technology, strategy, experience and value.
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