Listen Lays Off Staff In Bid For Profitability

In a restructuring move aimed at shortening its road to profitability, Listen.com has laid off 25% of its work force.

On Jan. 3, the company pink-slipped 42 employees from its engineering, marketing, editorial, and product- and business-development departments. All affected employees will receive severance packages, the company says.

No layoffs, however, were made in the sales department.

In a statement, Listen.com CEO and founder Rob Reid said, "The realities of the market, the changes in our business model, and the need to minimize the time it takes to reach profitability all factored into this decision."

A company spokesman says that Listen.com is moving away from its consumer model to a business-to-business model. The layoffs had been planned for several weeks but were held off until after the holidays, he says.

Like many music sites, privately held Listen.com is shifting to a business-to-business model by building up a suite of digital services that it will syndicate to other companies and Web portals.

For example, the company recently acquired WiredPlanet.com for radio streaming services and has partnered with the personalized music company Mood Logic.

"We don't know what distribution system will win out, but consumers will want to do more than type the name of their favorite band and download a track," the spokesman says.

The company continues to operate its search directory, which points consumers to legal music downloads on the Web.

Listen.com, however, doesn't have a peer-to-peer service. It failed in its bid to purchase the assets of Scour; on Dec. 12, CenterSpan Communications outbid Listen.com for file-sharing company Scour in U.S. Bankruptcy Court (Billboard, Dec. 23). CenterSpan will incorporate the Scour Exchange file-sharing software into its own C-Star technology and plans to launch its service with licensed content in the next three months.

Reid has said that Listen.com does not want to develop its own proprietary file-sharing service and is actively looking for a partner.

The spokesman says that the company has "plenty of money in the bank" and that with the restructuring it expects to reach profitability by 2002.

Listen.com is financially backed by the five major record companies—BMG Entertainment, EMI Recorded Music, Sony Music Entertainment, Universal Music Group, and Warner Music Group.