Tish Williams
SAN FRANCISCO -- Thank you for those kind words.
Robertson Stephens analyst Steve Birer kept things short and hostile when introducing Bob Bernard, chairman and CEO of MarchFirst (MRCH Quote - Cramer on MRCH - Stock Picks), at his firm's tech conference here Tuesday. Less than 24 hours after an earnings meltdown, Birer zinged, "I don't often get to introduce a company that announces a loss of $37 a share." On Monday, MarchFirst announced announced a writedown of $6.5 billion, which helped create the big loss. Not the thing to impress your investment banking host's clients.
First, send your thoughts and prayers in the direction of MarchFirst employees. The online consulting firm has cut 2,100 employees -- with two-week to three-month severance packages, according to U.S. law, and longer packages for European employees. It's cutting around $25 million in costs a quarter and selling noncore assets in the offline, nondigital arena. And it's scrapping to get "utilization rates" (think billable hours vs. hours spent instant messaging loved ones) up to 68% in the third quarter from the fourth-quarter's abysmal 48%. Layoffs, just the thing to make you want to work 20% harder. While you're at it, send those good vibrations investors' way as well: MarchFirst offered employees the chance to reprice stock options six to eight weeks ago -- swapping one for every three employees turned in -- and those worker bees turned in 26 million options. Bernard was happy to get "reduced overhang." None of which decreased investors need for blood. In the breakout session, steaming investors demanded to know if the company has the cash to continue its fight. The CEO outlined his $130 million in cash and a $70 million credit line to be signed any day now. He assured a skeptical crowd that it would be "impossible" for MarchFirst to dip below $100 million in cash. As impossible as a $6.5 billion writedown?
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