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(April 2, 2001) -- Online loyalty marketing company Netcentives is laying off 120 people companywide -- about 20% of its workforce -- and reducing contract labor, administrative and travel costs to stay on track to break even on expected cash flow from operations in the fourth quarter.

The San Francisco-based company reduced 2001 revenue expectations to $65 million to $70 million, from $85 million to $90 million, and initiated cost-cutting measures to improve earnings-per-share expectations.

"The major reason for all of these actions is to enable us to operate in this kind of environment and take a more conservative approach," said Stacey Levitz, senior-director, investor relations at Netcentives.

In addition, the company has added the role of CEO to the duties of President Eric Larsen, who is responsible for day-to-day operations, while Chairman West Shell III takes a more strategic, client-focused role. Shares of Netcentives were at 88 cents in midday trading on the Nasdaq today, down from it 52-week high of $30. -- Cara Beardi

Copyright April 2001, Crain Communications Inc.

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