The decline in demand for E-implementation services is affecting E-strategy companies as well. Answerthink Inc. on Wednesday tucked pink slips in the stockings of about 150 interactive-marketing and Web-development consultants--about 8% of its workforce.
Answerthink also expects profit for the fourth quarter of 2000 to fall short of expectations, largely because of the company?s reliance on dot-com clients tabling projects while they scratch for new funding. Fourth-quarter revenue is expected to be $68 million to $70 million, down from the $86 million originally projected. The firm expects to post a loss of $7.5 million to $8.5 million.
Answerthink?s quandary is not unique to the E-services market, where service providers Scient, Razorfish, iXL Enterprises, Lante, MarchFirst, Viant, and others have watched income dry up and turned on their staffs to lessen the bleeding. For 2001, Answerthink says it's looking forward to sequential quarter revenue increases of 3% to 7%. That would amount to fiscal-year revenue of $320 million to $325 million. Profit, according to the company, would be about $24 million, or 49 to 53 cents per diluted share.
"No one appears to be insulated from the market?s downturn," says Barry Chubrik, a VP with Credit Suisse First Boston. "Companies want to decrease items on their balance sheets, so the money they?re spending is shifting to outsourcing [rather than E-business consulting or implementation], which favors old-line service providers like IBM Global Services, EDS, and CSC."