C-bridge Internet Solutions swallowed some of its pride last week, along with a bitter pill in the form of staff layoffs.
The Web integrator is dismissing 100 employees, or 14 percent of its workforce, because of a slowdown in the e-consulting market. The layoffs are somewhat of an about-face for C-bridge. The Boston-based consulting firm launched a PR blitz in December, telling reporters not to confuse C-bridge with rival Web integrators that were cutting staff amid the dot-com meltdown.
Nevertheless, C-bridge simply wasnt immune to industry weakness. "The market [showed] signs of slowing down, and some of our customers were not able to pay after Q4," says Joe Bellini, president and CEO of C-bridge. "In addition, we were not immune to the market slowdown that the others were forecasting."
The Prognosis C-bridges true financial condition wont be fully known until the company announces Q4 financial results on Tuesday, Jan. 23. But despite the layoffs, there are signs that C-bridge remains one of the industrys better-run Web integrators.
Indeed, the company spent most of last week assuring Wall Street that it will hit 2001 earnings targets of 14 cents per share, up from previous estimates of 13 cents per share. And C-bridges financial results—including revenue, gross margins and net income—showed steady improvement throughout most of last year.
Still, C-bridges growth surely will slow in 2001. "As we entered the second week of January, our analysis showed that our sales visibility could no longer support our head-count level," Bellini says. "We needed to right-size C-bridge to get the market opportunity. This will leave us with a healthy, but obviously slower growth rate for 2001."
Of the 100 employees laid off, 86 were billable consultants, including 68 entry-level consultants and 18 senior-level consultants. The remaining axed positions include four from education, seven from human resources and three from sales. In addition, in connection with the workforce reduction, the company says it will incur a one-time charge of $750,000.
Dont Lump Us With Them Despite the setbacks, C-bridge appears to be in better financial shape than many of its rivals. MarchFirst, for instance, has dismissed more than 1,000 employees (or more than 10 percent of its staff) since November. The company hopes the cuts will slash expenses by $100 million annually.
MarchFirst also faced a cash crunch in December and was forced to raise more than $100 million in order to fund operations into this year. Francisco Partners came to MarchFirsts aid on Dec. 28, with a $150 million investment.
So far, C-bridge has avoided such financial setbacks. As of the Q3 close, the company had $57.2 million in cash and $97.2 million in total assets. Assuming C-bridge manages to post a profit this year—as per the companys business plan—long-term funding should not be a problem.
Partners will play a critical role, as C-bridge strives to generate profits. The companys partner program (www. c-bridge.com/whoweare/alliances.html) includes strategic allies (EMC, HP, Oracle and Sun) and iSolutions partners (Bea Systems, Qwest and dozens more).
On the flip side, C-bridge has entered several vendor-driven partner programs. Most recently, the company joined Intels e-Business Solutions Provider Program. The duo will work on joint marketing programs and joint business development. C-bridge also will certify some of its employees to recommend, design and install Intel-based servers.
Be Our Guest Meanwhile, C-bridge is hosting several partner events of its own. The company earlier this month invited prospective partners into its New York offices. C-bridge hopes to host a similar event in its San Francisco office within the next couple of months, say David S. Kennedy, a business development manager at C-bridge. (For details, send e-mail to [email protected]).
"The are hundreds of potential partner combinations out there," says Kennedy. "These events give us a chance to explore potential relationships that are a win-win for us and new strategic allies."
In a contracting market, no consulting firm can afford to stand on its own — especially C-bridge.