MCI/News Corp. online venture cuts nearly 300 staffers

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The MCI/News Corp. online joint venture, as expected, on Thursday let go close to 300 of its employees. Insiders expect Scott Kurnit, president of the venture, to resign shortly.

At a meeting Thursday morning, Anthea Disney, editor in chief of the service, told those employees being let go--about 40% of the total staff--that she was ``heartbroken,'' while Mr. Kurnit told them ``it was the hardest thing he ever had to do.''

Jonathan Miller, news editor of the joint venture's editorial group, resigned Wednesday. Remaining employees are gathering Thursday afternoon for a meeting.

Employees who were fired received 10 weeks of severance pay, including health benefits. News Corp. said it will also try to relocate those who were fired to somewhere within News Corp. or assist them in finding jobs elsewhere.

Last week, MCI announced a separate online alliance with Microsoft Corp., leading many industry followers to question MCI's loyalty to its online venture with News Corp. The venture had suffered a series of setbacks since its inception last August. Insiders say the cultures of executives inside MCI and News Corp. clashed, and the two companies were never ``on the same page.'' A budget was never approved, service names were disputed and battles over advertising and content concerns slowed the service's launch.

Content created by the editorial team is currently on the service's beta site at http://www.iguide.com. The team working on the service's core product, called the iGuide, are still employed and plan to move forward with the guide.

News Corp. is currently in negotiations with Oracle Corp. to take on a stake in the joint venture company. MCI has cut its stake to 15% from its original 50%.

--Kim Cleland and Chuck Ross

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