NurseWeek

Drkoop lays off a third of its staff

By Noel Holton
Health24News
August 31, 2000


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Washington (H24N). The new management team at online health information company drkoop.com has let a third of its employees go "to streamline operations."

The workforce reductions come a week after the struggling company received a $27.5 million cash infusion to keep it afloat. The company also announced that it had acquired a new management team to boost the company’s chances of survival.

In May, drkoop.com laid off 35 percent of its staff, which left it with 120 full-time employees. The latest layoffs, which will affect both full- and part-time employees, leave the company with about 80 employees.

Drkoop, which is based in Austin, Texas, also said it would reduce operation expenses to about $6.5 million for the third quarter ending Sept. 30, down from $12.8 million in the second quarter.

Drkoop only had about $2 million on June 30, and announced then that it was rapidly running out of cash. Last week’s cash infusion came from a group of investors including Prime Ventures, JF Shea Ventures, Cramer-Rosenthal-McGlynn and RMC Capital.

"We said from the beginning that we were going to run this company like a real business," said the newly appointed President Ed Cespedes in a statement. "These are real people behind these layoffs, and these were not easy decisions."

Drkoop was founded by former U.S. Surgeon General C. Everett Koop. Shortly after going public last July, drkoop’s stock hit a high of $45 a share. It dove to 65 cents a share several weeks ago, but has risen slowly since then. This morning, shares of drkoop stock were up 6 cents from yesterday, or 5 percent, to $1.25 a share.