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CueCat workers face mass redundancies
DigitalConvergence skirts around titsup.com atoll
DigitalConvergence, which markets the CueCat scanner, has become the latest victim of growing sentiment in the market against Internet stocks.
Peter Eschbache, a vice president at the Dallas-based start-up, confirmed that a large number of employees were told they would lose their jobs last Friday, though he didn't have exact figures. Reports suggest 160 people will go.
According to Eschbache, the firm would lower its headcount from around 300 to "in excess of 200" to reduce expenditure because, in light of prevailing market conditions, an anticipated public offering was no longer possible.
He said job cuts would be across the board and wouldn't result in the closure of any of its offices in New York, London or Dallas.
The job cuts leave the firm in what Eschbache described as "maintenance mode", meaning DigitalConvergence wouldn't be aggressive about going after new business but would continue to be able to service its existing clients. He said the redundancies were not related to sales but rather that financing was drying up.
The CueCat system, which has been the subject of privacy concerns, allows customers to visit a Web site after scanning the bar code on products or on a page of a magazine, so saving consumers from typing in potentially lengthy web addresses.
RadioShack, under contract from DigitalConvergence, distributes scanners that permit this. ®