Online music co. to lay off 15 percent

The Associated Press
Friday November 16, 2001

REDWOOD CITY — Troubled Internet music company Liquid Audio will lay off 15 percent of its work force, the second round of deep staff cuts announced by the company this year. 

News of the cuts came during a week when the Redwood City-based company reported a net loss for the third quarter of $6.1 million, or $0.27 per share, compared with a net loss of $8.9 million, or $0.40 per share, for the same quarter in 2000. 

In May, Liquid Audio laid off about 40 percent of its workers and consolidated facilities. The company offers secure online music distribution services. The May reductions cut the company’s staff of about 200 by 79. This week’s cutbacks will eliminate an additional 18 positions, leaving the company with 104 employees. 

Earlier this month, the company’s board of directors rejected a buyout offer from Steel Partners and BCG Strategic Investors. Those investment firms made a $3 per share offer in a letter to Liquid Audio’s board of directors. 

The board decided the offer was below the company’s cash value. Liquid Audio confirms it has since received two complaints that were filed by stockholders in connection with the rejection of the Steel Partners offer. 

“The company has reviewed the complaints and believes that each of them is without merit and plans to defend them vigorously,” Liquid Audio said in a statement. 

Shares of Liquid Audio fell 9 cents to close at $2.49 Thursday on the Nasdaq Stock Exchange.