Organic, joining the flock of troubled i-services ventures cutting jobs and lowering forecasts, late Dec. 13 said it cut 270 jobs, or about 25% of its staff. Co-founder and Chairman Jonathan Nelson is stepping down as CEO. The Internet professional services company also announced a restructuring and lowered revenue and earnings expectations for the fourth quarter and 2001. San Francisco-based Organic said Mark Kingdon will succeed Mr. Nelson as CEO effective Jan. 15.
Mr. Kingdon, a former PricewaterhouseCoopers management consultant, was most recently with Idealab, an ailing Internet incubator. He will run day-to-day operations. Mr. Nelson, who as of June owned 59.3% of Organic, will focus on strategy.
In the reorganization, Organic is closing its recently opened Atlanta and Boston offices. Organic expects fourth-quarter revenue of about $26 million--even with a year ago, but far off revenue of $37.4 million in the third quarter, when Organic lost $16.5 million.
Chief Financial Officer Sue Field said in a statement: "The projected shortfall is due to a combination of budget reductions at several of our larger clients, the successful completion of project work during the third quarter that did not result in add-on opportunities moving forward and a slower than anticipated realization of new business wins."
DaimlerChrysler, the troubled automaker, accounted for 30.6% of Organic's revenue last quarter; emerging growth and startup ventures accounted for 8%. Organic announced the bad news after markets closed. The stock closed Dec. 13 at $1.16, off 3 cents, but down 98% from the $60 peak it reached shortly after its February, $20-a-share initial public offering. Omnicom Group owned 17.1% of Organic as of June.
Copyright December 2000, Crain Communications Inc.