August 31, 2000 7:15 PM PDT

Egghead pulling jobs out of pricey California

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January 5, 2000 today said it is moving about 20 percent of its Silicon Valley-based jobs to Washington state during the next few months as part of a plan to achieve profitability by the end of next year.

The Internet technology retailer said that functions including engineering, accounts payable and inventory accounting will be moved to its offices in Vancouver, Wash. The move from Menlo Park, Calif., allows it to eliminate redundancies and take advantage of Vancouver's low cost of living, the company said.

The move will take place during the next four months, Egghead spokeswoman Joanne Hartzell said.

Of the approximately 46 employees who will be affected by the move, 13 holding certain key positions have been offered relocation packages, Hartzell said. The remaining employees have been offered various "stay" packages, depending on the position, in hopes that they will remain with the company for the next few months, she said.

The company also said locating these departments in a geographic area where it is easier to recruit and retain such employees is designed to improve productivity and reduce costs.

"In recent months we have stressed our focus on profitability, and both increasing efficiency and reducing costs are critical to our success," Jeff Sheahan, Egghead's chief executive, said in a statement. "With soaring employment costs in Silicon Valley, it makes financial sense."

The company employs about 220 workers in Menlo Park. The move will not result in any layoffs, Egghead said, and the company plans to add about 250 new employees in Vancouver during the next nine months.


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