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Study: Tech firms that cut marketing budgets hurt future profitability

Published on .

New York--Technology companies that cut sales and marketing budgets hurt their future profitability more than those that cut operating costs, according to a new study by Getzler & Co., a corporate restructuring consultancy. Of the 46 technology companies polled that cut sales and marketing costs, losses more than doubled from the second quarter of 2000 to the third quarter. Of the 25 technology companies that cut operating costs, losses remained constant from the second quarter to the third. Getzler polled executives at 190 technology companies. The average company lost $13.4 million on $22 million in revenue during the second quarter of 2000, compared with an average loss of $12.8 million on $25 million in revenue during the third quarter.
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