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CyberBucks Cuts in staff likely as Daou begins retooling



Active.com Is Ranked Among Dot-Com Survivors

Reorganizations, restructurings, and/or consolidations are cropping up among many San Diego high-tech firms, but whatever phrase is used, it usually means there are job cuts.

Earlier this month, Daou Systems Inc. announced it was consolidating five of its divisions into two in a move designed “to better serve its current and future clients in the areas of strategic consulting, applications, infrastructure and operations.”

The San Diego-based firm, a provider of integrated information services to the health care industry, didn’t say exactly how the actions would affect the company’s head count, but would provide more information in its upcoming quarterly report.

Daou did say once the reorganization is complete, it would end up with about 400 employees. The job cuts could be significant based on the company’s last released head count about a year ago of 704 employees.

Neil Cassidy, Daou’s chief financial officer, said the consolidation was necessary to eliminate overhead and the duplication of services.

“Basically we’re creating a new version of Daou,” Cassidy said. “We’re right-sizing certain areas of the organization to focus on lines of business we have a right to play in and where we can maintain a sustainable competitive advantage.”

Under the new configuration, the firm will consist of a technology division in Maryland and an applications division in Indianapolis. The move affects Enosus, a Web development operation based in San Diego that had between 10 to 15 people locally. Cassidy said about half of those employees were retained, while the other half were reassigned to other positions.

The moves won’t have a significant effect on Daou’s Sorrento Valley headquarters office which has only about 30 employees.

Daou Systems has been in flux in recent months. CEO Larry Grandia resigned last October after some 14 months on the job, and was replaced by Jim Roberto.

The company lost $12.3 million for the nine months ended Sept. 30, while revenues have declined 39 percent to $49 million.

Meantime, Daou shares have slid below $1 and were trading at 66 cents Feb. 12. Its yearlong range on Nasdaq was $5.75 to 25 cents.

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Active.com Makes Survivor List: La Jolla-based Active.com, a registration and data management company for participatory sports and recreation leagues, had some good news and bad news this month.

The firm was ranked No. 6 on a list of eight dot-com survivors in an article in E-Commerce Times. The daily online news service rankings for the top three dot-com survivors were eBay, Yahoo! and Amazon.com. Besides Active, other survivors were iQVC, JCPenney.com, Barnesandnoble.com and Travelocity.

Active.com spokeswoman Shelly Burnside said the fact the ranking derived from interviews with industry analysts is a testament to the firm’s commitment to reaching profitability this year.

The other company news wasn’t so hot. Active.com laid off 30 employees last month in an across-the-board reduction as a way to fit its staffing to operations, Burnside said.

The cuts involved jobs in marketing, sales, operations and customer support. After the cuts, Active.com has about 115 employees including 25 in its Sacramento office.

AirFiber Lays Off 35 People: Rancho Bernardo-based AirFiber Inc., a developer and supplier of wireless optical networking equipment to large telecommunications carriers, said it reduced its staff by 35 people recently.

After the reductions, the company has 145 workers.

“It was done in response to changes in the telecommunications industry,” said Geoff Mordock, manager of public relations. “Some of the largest carriers said their spending will be flat this year.”

Most of the job cuts came in the company’s marketing and sales staff, particularly staff targeting China and Latin America. Some of the marketing staff was moved into engineering, while the rest will be contracted out, Mordock said.

AirFiber will concentrate its sales activity on North America, Europe and some parts of Asia.

The company recently raised $37.5 million in capital investment led by Nortel Networks, along with participation from Qualcomm, Enterprise Partners and Foundation Capital. The funding brings the total raised since its inception in 1998 to $42.5 million.

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Venture Catalyst Refocuses, Loses Money: San Diego-based Venture Catalyst’s restructuring ended up costing the company about $6.8 million, according to its second-quarter results.

The firm that provides high-tech support, consulting and Web services to the California Indian gaming industry, said the expenditures came from the closing of a business incubator here and offices in Orange County, Los Angeles and Phoenix, and the write-off of goodwill associated with earlier acquisitions.

It also reported a write-down of $481,000 on the value of its stock portfolio.

All of this contributed to the company reporting a $9.9 million loss in its second quarter ended Dec. 31, compared to a loss of $1.4 million in the previous year’s fourth quarter.

For the first six months, Venture Catalyst lost $10.6 million on revenues of $8.6 million, compared with a loss of $898,000 on revenues of $5.7 million for the like period in the previous year.

In addition, because of the restructuring, the company laid off 34 employees last month , about half of its staff , a fact it had already reported.

Venture Catalyst’s board of directors apparently still has confidence it can bring the firm out of the woods. It approved a plan to repurchase up to $1 million in its stock, in purchases it will make over the next 12 months.

Venture Catalyst was trading at $1.31 on Feb. 12, with its 52-week range between $1 and $14.75.

TransCore Buys Oregon Firm: TransCore Inc., a San Diego-based private firm that provides technology solutions to the transportation industry, purchased Portland, Ore.-based DAT Services, a business-to-business e-commerce firm, for an undisclosed price.

TransCore is a former business unit of SAIC that was spun out as a result of a management buyout in 1999. The fourth acquisition by the company increases the total staff by about 350 people, bringing its total to about 1,800.

TransCore has more than 80 locations nationally and abroad in 37 countries. DAT had offices in Nashville; West Palm Beach, Fla., and Brussels, Belgium.

Employment at the local headquarters office won’t be affected and remains at 165, said spokeswoman Barb Catlin.

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ZDI Bought By Top Execs: Zamudio Data Information Inc., a privately held San Diego company providing Internet data management services, was sold to the company’s president, Donald Greenspan, and its chief technology officer, Steve McMahon, for an undisclosed price.

The company, which has been in business for 18 years, was formerly owned by the Zamudio family. The transaction was financed by First National Bank. Employment and growth prospects are excellent, with staff now at 70, almost double from the number a year ago, said spokeswoman Janis Heppell.

Send any high-tech finance news to mallen@sdbj.com.

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