Digital Goods Cuts 19 Jobs; Reports $25-Million Loss
By Jim Milliot -- Publishers Weekly, 4/23/2001
As it makes the transition from a digital rights management company to a digital marketing company, Digital Goods eliminated 19 jobs last month from its total workforce of 63. Twelve of the cuts came in DG's technology development and administrative groups, with company chairman Scott Griffith explaining that DG's new focus on content marketing "does not require the same level of technology development and support staff as our rights management business did." Seven other jobs were eliminated when DG closed its Chili Pepper division and brought creative service functions in-house.
The staff reductions are expected to cut DG's monthly spend rate by 30%, and the company can use all the cost savings it can find. For the year ended December 31, 2000, DG had a net loss of $25.2 million on revenues of $675,657; in 1999 the company had a loss of $9.8 million on revenues of $83,790.
As the company tries to reinvent itself, it recently launched Amplifi, a suite of content marketing services designed to help publishers distribute their digital products over the Internet. It has reached agreements with Simon & Schuster, 1stBooks, the American Management Association and Dun & Bradstreet.
Despite DG's huge loss in 2000, Griffith received a $100,000 bonus at the end of the year in addition to a salary of $173,392. Griffith has served as president and CEO of the company since spring 2000; under his contract he will receive a base salary of $250,000 and is entitled to a bonus of up to 50% of his salary.
