ICQ, which develops Internet conferencing technologies, announced yesterday the dismissal of 37 workers.
The decision made by new CEO Mark Bernstein involves the laying off 17 permanent staffers and 20 others employed through manpower agencies, leaving a total payroll of 90 workers.
The dismissals are part of the cost-cutting drive of ICQ's parent company, America Online, which announced last month a program aimed at trimming expenses by $100 million.
Bernstein was criticized by some for quickly implementing the job losses before better understanding where to trim. The current wave of dismissals comes two years after 35 layoffs, when America Online slashed 4,000 from its payroll worldwide.
"My work colleagues and I at ICQ are sorry that we have to part from these workers, who we regard as part of our family," Bernstein said yesterday. "We feel ourselves obliged to help them in finding alternative places of work in the difficult Israeli labor market of today."
He explained that advertising revenues had fallen, but there was no basis for any reports that ICQ's activities would be transferred from Israel. "Although there have been signs of recovery, revenues from the past two years... have been adversely affected from the lower prices in online advertising, and we have to adjust our expenses accordingly," he said.
America Online bought the Tel Aviv-based ICQ in May 1998 for around $400 million. The company's instant messaging technology on the Web is among the most popular available, with around 230 million downloads and 150 million registered users. Since AOL's acquisition of ICQ, four of the company's institutional investors have left as have many original staffers.
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