Netscape cuts its workforce

Netscape has confirmed plans to axe up to 12 per cent of its workforce this week in response to projected Q4 losses - the first in its history.

The browser developer was seen as one of the most successful software companies to emerge from the internet but has been forced to lay off almost a quarter of its staff as part of a restructure. It refused to say which workers and operations will be affected until Q4 results are published on 27 January.

Netscape blamed the job losses on fierce competition with Microsoft in the Web browser market. A survey published this month showed that MS Internet Explorer is now used by 63 per cent of Net surfers, compared with Netscape's 35 per cent, signalling the erosion of Netscape's former dominance.

The market share figures are reflected in an expected loss of between $14 million and $18 million for the quarter ended 31 December 1997. Acquisition and restructuring charges will push the quarterly loss up to $89 million, worse than Wall Street predictions.

The market's reaction to the surprise figures saw Netscape stock hit an all-time low last week.

Company chiefs hope to break into a profit this year by relying less on its Web browser and more on its emerging enterprise software.

E-commerce and business systems are a key part of this strategy.

Laurent Lachal, software consultant at Ovum, said: 'Netscape is right to go for areas like e-commerce, but any profits in this market are going to be long term.'