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MarchFirst Inc. Wednesday became the latest E-service provider without a stock affiliation as shares of the Chicago-based company stopped trading on the Nasdaq when the stock market requested additional financial information from the troubled company. MarchFirst has declined to comment either on its status with the Nasdaq or reports that the E-services provider would lay off between 2,000 and 3,500 of its 7,000 employees.
MarchFirst is far from the poster-child for the financial woes of the E-services provider market. Earlier this week, Viant Corp. said it's closing three offices and laying off 211 employees, or 38% of its staff, and competitor Proxicom Inc. reduced its staff by 227 people, or 19%.
Last week, the Nasdaq notified E-services provider Xpedior Inc. that the company's stock has failed to maintain the required minimum bid price of $1 over a period of 30 consecutive trading days, and that the stock will be de-listed if it doesn't meet those requirements by April 17. Xpedior will also close four of its offices and reduce its workforce by 300 employees. In addition, president Anthony Capers, executive VP of operations Mark Hansen, and senior VP of sales Robert Whitehead left the company.
Now is the time for the clients of these sinking E-services providers to transition their projects to more stable companies, says Forrester Research analyst Christine Overby. If, for example, a client had hired Xpedior for its knowledge of BroadVision software, a viable alternative would be PricewaterhouseCoopers, which has also developed BroadVision expertise. "Another way for midmarket companies to protect their projects," she says, "is to assign a larger number of internal IT staff members to these projects to ensure knowledge is transferred from the previous service provider and can be transferred again if a new service provider is chosen."
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