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More cuts at drkoop.com
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August 30, 2000: 1:46 p.m. ET
Online medical Web site reducing work force by a third to further cut costs
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NEW YORK (CNNfn) - Ailing medical Web site drkoop.com Inc. Wednesday announced that it will cut its work force by about one-third -- the second string of layoffs in three months -- to reduce its cash outlays and keep itself up and running.
Drkoop.com will eliminate roughly one-third of its part-time and full-time positions, helping to reduce its cash expenses for the third quarter ending Sept. 30 to about $6.5 million, down from $12.8 million in the second quarter and $18.6 million in the first.
The announcement comes about a week after drkoop.com announced the receipt of a last-minute $27.5 million injection from a group of venture capital investors, and unveiled the appointment of a new management team.
 "We said from the beginning that we were going to run this company like a real business," said Ed Cespedes, drkoop.com's newly appointed president. "There are real people behind these layoffs and these were not easy decisions. However, we are ready to put the past behind us and move forward with our plans to rebuild this company and maximize shareholder value."
The cuts reduce the number of employees at the Austin, Texas-based company to 79. Twenty-two full-time staff members were fired, 20 part-time workers were let go, and about 10 positions were purged through attrition, according to the company. Drkoop.com had approximately 130 full-time employees as of May when it announced its first round of job cuts.
"I wasn't surprised to see (the layoffs) happen after the new management team was put in place," said Elizabeth Boehm, an analyst with Forrester Research. "They need to send a strong message out that says they are really taking this in hand and being aggressive about making changes."
Drkoop.com has been fighting a deepening cash crisis for several months, partly because investors shied away from dot.com companies like it that were seen primarily as expensively run content providers rather than online sellers of products and services.
 Quarterly losses mushroomed significantly faster than any form of revenue, which ultimately caused the company to run out of cash despite raising $88.5 million in an initial public offering in June 1999. The struggling health Web site was co-founded by former U.S. Surgeon General C. Everett Koop.
As of June 30, drkoop.com had just $2 million in cash and earlier this month said its funds had nearly run out. "We require significant additional financing in the very near future to fund operations," the company said in a Securities
and Exchange Commission filing. "We will not be able to continue to operate our business unless such a financing is completed."
In addition to naming Cespedes president, drkoop.com named Richard Rosenblatt as chief executive officer and Stephen Plutsky as chief financial officer. They lead Prime Ventures, a venture capital fund investing in technology and Internet companies.
Koop himself will continue to serve as chairman, and former President and CEO Donald Hackett will remain a director of the company.
Shares of drkoop.com (KOOP: Research, Estimates) rose 3 cents Wednesday to $1.22. The stock hit a 52-week high of $24.50 back in March. 
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