EMusic.com Inc. (Nasdaq: EMUS) tacked on 3/16 to 2 7/8 Thursday after the online seller of MP3 music said it has let go about 20 percent of its workers as part of a cost-reduction plan.
The company said the cost cuts will save more than $15 million over the next 12 years. For the quarter ending June 30, EMusic expects to report a 20 percent increase in pro forma revenue over the previous quarter, and a smaller loss per share than analysts estimate.
The layoffs leave about 180 employees working in the company’s Redwood City, California headquarters and its offices in Chicago, New York, Los Angeles and Nashville.
“These preemptive steps reflect the changed dynamics on Wall Street,” said President and Chief Executive Officer Gene Hoffman. “While the market for downloadable music is poised for tremendous growth, we recognize the need to manage our expenses wisely and aggressively.”
EMusic claims the Internet’s largest collection of downloadable MP3 music. “We believe that we are well positioned for continued growth and leadership as the market for downloadable music continues to mature with the release of more high-profile content and the rapid consumer adoption of MP3 hardware players and superior bandwidth and storage solutions,” said Hoffman.