Four members of the senior management staff of
(Nasdaq:IGLD) are no longer employed by the company. Daphna Appel (VP HR & Q) and Meny Milo (VP Service Division) have been fired, while Ami Feinstein (VP R&D) and Yossi Keret (CFO) have resigned. They may not be replaced.
Some people were shocked by the reshuffle. "Some people saw the writing on the wall and resigned. Others others did not," CEO Eli Holtzman said. "The personal aspect is irrelevant. What is important is implementing cutbacks for significant savings."
Internet Gold is restructuring and cutting expenses. Holtzman told TheMarker.com that Internet Gold has only $12 million to $14 million cash left and has to stop burning up money.
He added that the vacated positions will be taken over by other VPs or lower-ranking workers.
Holtzman said that he intends to stem the cash outflow and aims to maintain reserves of at least $7 million. "We hope to achieve positive cash-flow in the third or fourth quarter of 2001," he said.
Internet Gold, which is selling on Nasdaq at an all-time low of 83 cents, has seen its market cap slide to $15 million. It is undergoing a severe crisis and fighting for survival. At the end of 2000, the company had cash reserves of $22 million, but its burn rate reached $5 million per quarter. The company faced running out of cash before the end of 2001.
Holtzman announced a reorganization after publishing the fourth-quarter statement. The company resolved on a spending limit of $9 million for 2001, and to try to attain profitability by the first quarter of 2002.
At the time, Holtzman claimed that the process of cash savings and expense reductions had already been instigated in the last quarter of 2000, when the firm rid itself of money-guzzling activities. The company's cumulative losses for 2000 amounted to $19 million.
At the beginning of 2001, Internet Gold implemented two major steps to reduced its losses. The first was writing off its investment in Insider, which lost the company $340,000. The second was its incorporation of Afek into Gold Mind Ltd. (62%) to operate website development activities and free Internet Gold to concentrate on marketing.
Internet Gold, owned by
, reached a record market value of over half a billion dollars, but was seriously affected by the fall of the dot.com sector. The company is currently having great difficulty in raising capital, and Eurocom is apparently no longer interested in investing.