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`Mr Taiwan' fires a third of staff

MrTaiwan.com founder and Chief Executive Peter Kurz said he fired a third of the investment advisory company's staff in an effort to break even by as early as next month.

Kurz said the job cuts will mean subscriptions to his Web site mrtaiwan.com and fees paid for research sold through Capital Securities Corp (群益證券) will help the Internet company realize a profit in August. The company conducts research on 56 companies listed in Taiwan through its subsidiary Insight Pacific Investment Research.

"This is the most difficult decision I have ever made in my life, but it was unfortunately necessary for the company to weather the current market downturn," Kurz said after firing 16 people and reducing staff numbers to 29 in Taipei and San Francisco. Kurz refused to disclose any financial information.

Since leaving Merrill Lynch & Co where he was head of research in Taiwan more than a year ago, Kurz has spent US$4 million starting his businesses. Taiwan's key stock index, the TWSE Index, has slumped 42 percent from a year ago, and daily trading volume has fallen to NT$55.5 billion (US$1.6 billion) from NT$110.4 billion in the first three months of this year.

Meanwhile, Taiwan's Internet businesses as a whole are pessimistic about the second half of this year as acquisitions and layoffs will continue to dominate the technology sector.

Local dotcom companies began to feel the chill in the third quarter of 2000 when the global economy started to take a downturn. Many dotcom companies which had spent tremendous amounts of money on advertising campaigns earlier in the year were forced to minimize their operations to cut costs only a few months later.

The first wave of layoffs by Taiwan's dotcom companies surged last November and reached a peak towards the end of the first quarter. Even the leading Chinese portal sites, sina.com (新浪網), yam.com (蕃薯藤) and dreamer.com (夢想家) have had to pursue cost-effective measures and cut jobs to save on operating costs.

Furthermore, the global economic recession has worsened the problems of the Internet sector because the rigid capital market has failed to offer new funds to dotcom companies.

Therefore, Web sites determined to hold out have realized that they have to make adjustments to their operations. Yam.com, a leading portal site in Taiwan, for instance, is gradually shifting its role to an applied service provider (ASP). The Systex Group (精業集團), with seven Internet-related businesses, is also trying to have companies of similar operations merge into one. In doing so, job cuts will be inevitable.
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