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Tuesday, 8 May, 2001, 13:07 GMT 14:07 UK
Terra Lycos cuts jobs
Terra Lycos website
Sales are up five times but revenue below expectations
Spanish internet service provider Terra Lycos said on Tuesday it would slash its workforce by 15% but revealed smaller losses in the first quarter.

Terra Lycos reported first-quarter losses to 174.5m euros ($157m), up from a loss of 70.0m euros in the same period of last year.

But the company reported a big increase in overall business and usage, with sales up by five times to 177.1m euros.

The world's third largest internet service provider also announced 15% of its 3,352 employees would be cut but did not say when or where the job losses would occur.

Company president Joaquin Agut said that he was "very satisfied" with the results for the first quarter.

Terra Lycos was formed when Spain's Terra Networks took over US-based Lycos in a $4.6bn deal last October.

Shares were up 3.5% on the news on the Madrid stock exchange.

Outlook

A number of upheavals at the company have put it under strain this year including the resignation of three senior executives and a number of downgrades by investment houses.

Terra Lycos has not yet revised its $900m revenue target for this year, even after rival Yahoo lowered its sights for the second quarter.

Analysts expect the company to slash the forecast during a conference call on Wednesday at 1600 GMT.

The future of Executive Chairman Joaquim Agut's may be on the line if he cannot show significant upturn in revenues by the end of 2001.

Global reach

Terra Lycos works in 19 languages in 42 countries.

At the end of the first quarter it had 98m users, 47m more than in the first quarter of last year.

The number of subscribers increased by 161% to about 7m of whom 4.5m were located in Spain and Latin America.

See also:

22 Feb 01 | Business
Terra Lycos chief quits
01 Feb 01 | Business
Terra Lycos chiefs step down
30 Jan 01 | Business
Terra Lycos buys page views
16 May 00 | Business
Terra and Lycos tie knot
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