TheStreet.com Plans 20% Cut in Work Force

TheStreet.com announced a sweeping cost-cutting program Thursday that includes slashing 20% of its work force, shutting down its operation in Britain and dismantling a joint newsroom with the New York Times.

Chief Executive Thomas Clarke said the measures would provide a “huge step” toward the online financial-news site’s goal of becoming profitable by the second half of next year.

“In today’s environment, companies have two clear choices: chart a direct path to profitability or shut down,” Clarke said. “We’re in this for the long haul. And to go the distance, we must operate at peak efficiency.”

About half of the expected annual cost savings of $18 million would come from the closure of the TheStreet.com’s British operation, which was due to run out of money by the end of the year. TheStreet.com owns 63% of the year-old business and plans to buy out the other investors for $3 million in cash and 1.25 million shares in stock.

Forty jobs will be cut across the company, which will save about $3 million a year but will not have a major impact on the site’s editorial content, Clarke said.

TheStreet.com also had reached a “mutual agreement” with the New York Times to shut down their 18-month-old joint newsroom, but the New York Times Co. maintains a 5.7% interest in TheStreet.com.

TheStreet.com has experimented with different subscription models but so far none has proved profitable. However, the company has a stockpile of $90 million in cash, and Clarke said he would continue to consider acquiring other companies as a way to expand.

Shares of TheStreet.com fell 53 cents, or 15%, to close at $2.97 on Nasdaq, well off their 52-week high of $22. The shares had traded as high as $71.25 in May 1999 when the company went public.