February 20, 2001 8:15 AM PST
Webvan bags its operations in Dallas
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Webvan's Dallas operations employed approximately 220 workers, who will receive 60 days severance effective Tuesday, the company said. The cash-strapped dot-com entered the Dallas market through its acquisition last year of HomeGrocer.com, another online grocery service.
Foster City, Calif.-based Webvan, which recently postponed the commercial launch of its service in northern New Jersey, Baltimore and Washington, D.C., said the move to halt service in Dallas was a necessary one and the right step to ensure the long-term viability of the company.
The move underscores the company's fight to survive. Like most dot-coms, Webvan has seen the bottom drop out of its stock price--its shares have lost more than 95 percent of their value in the last year and recently have been trading below $1 per share. The troubled company recently warned that it faces delisting from the Nasdaq because of its slumping stock.
In January, the once high-flying dot-com introduced a revised business plan centered on reducing its need for additional capital to fund operations this year. The company's new strategy focuses on profitability targets for its now nine U.S. markets; completion of the takeover of HomeGrocer; and a cash savings program to reduce annual corporate and operating expenses.
Webvan has said it expects to achieve a companywide, positive cash flow in the second half of 2002.