Study: Layoffs Signal End for Dot-Coms

According to data released Monday by Chicago, Illinois-based employment firm Challenger, Gray & Christmas, 24 of the 122 dot-com companies that have laid off workers in the past eight months subsequently ceased operations.

A month ago, a separate Challenger survey found that 1,263 of the almost 5,400 jobs lost since December came from 17 dot-coms that cut staff in June.

“As we forecast in our first report last month, the dot-com period of survival of the fittest could be expected to escalate — and so it has,” said CEO John A. Challenger.

The latest survey found that 2,194 Internet jobs have been cut since the last report was issued, with dot-com companies losing 7,592 jobs since December. Internet retailers accounted for the bulk of the cuts, with 1,812 layoffs. Dot-com service companies followed, with 1,287 cuts; entertainment sites were next with 948; portals were responsible for 786 lost jobs; and health and fitness sites shed 671 jobs.

B2B `Weathers the Storm’

B2B companies, however, are “proving to be better prepared to withstand the major changes in the marketplace” than their consumer-oriented counterparts, Challenger said. B2B companies, for the most part, have been able to “weather the storm,” he noted.

The B2B sector is expanding, both in terms of geography and products. Notably, VerticalNet, Inc. (Nasdaq: VERT) on Monday said it will form a European division through a joint venture with British Telecommunications Plc (NYSE: BT) and Internet Capital Group, Inc. (Nasdaq: ICGE). Also, Ariba, Inc. (Nasdaq: ARBA) is reportedly teaming up with IBM and Cisco Systems to bring B2B networks to mid-sized suppliers.

E-tail Shakeout

The business-to-consumer landscape has seen a steady stream of cash-strapped companies either shutting down or being swallowed by rivals. Hit hard have been the pet-product sector, with Petstore.com being acquired by rival Pets.com, and the grocery area, with HomeGrocer.com set to be bought by Webvan Group.

Now, some e-tailers are turning to brick-and-mortar rivals for help. Online music seller CDNow, Inc. (Nasdaq: CDNW) last week agreed to be bought by German giant Bertelsmann AG, and Peapod, an online grocer, recently got a cash infusion from Dutch supermarket chain Royal Ahold NV.

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