Terra Lycos to make U.S. layoffs

Spanish Internet service provider Terra Lycos on Wednesday said it will cut 22 percent of its U.S.-based staff in an effort to reduce "functional redundancies" in its worldwide operations.

The layoffs will affect 147 positions out of 650 in its offices in Waltham, Mass., Mountain View, Calif., San Francisco, Miami and New York. The cutbacks were the result of a shift in the company's business operations to a more global, rather than regional, focus, according to Kirsten Murawski, a Terra Lycos spokeswoman

"This is a further realization of efficiencies that we've been able to realize with our new global structure," said Murawski.

The layoffs come a couple of months after Terra Lycos' former head of U.S. operations, Stephen Killeen, left the company. Sources close to Terra Lycos said its organizational restructuring, which diminished the power of the company's U.S. division, was a factor in Killeen's departure.

Killeen's role as Terra Lycos USA president offered him autonomy to pursue acquisitions and to compete aggressively against established competitors such as America Online, Yahoo and MSN. However, a downturn in online advertising and the decision by German media giant Bertelsmann last April to renegotiate $675 million in advertising with Terra Lycos forced the Barcelona-based company to reorganize.

Murawski said Terra Lycos is focusing on promoting a number of Internet businesses on a worldwide basis, rather than by region. These businesses include search, finance, dating, Web publishing, sports, news, games, entertainment, personalization and communications services, she said. The company is also trying to grow its share of the Hispanic American market.