Digital Railroad Explains Strategy

Posted on 2/13/2008 by Julia Dudnik Stern | Printable Version | Comments (0)

After the mid-January news of massive layoffs at Digital Railroad, observers speculated that the company was in trouble. This week, the newly appointed CEO Charles Mauzy issued a statement that tries to alleviate these concerns.

Mauzy says the layoffs were not done to save the company, but to help it avoid problems. He did not list specific concerns.

Largely, the statement repeats what is already widely known: Digital Railroad sees more revenue-generating opportunity in its new Marketplace than in the photographer-centric image-archiving and e-commerce services that were previously the core of its business.

"This is a planned transition and doesn't mean that we'll stop investing in the sell side. It does mean that the balance will now shift measurably to the buy side," writes Mauzy.

Planned though it may be, this change in strategy came as a surprise to over 20 staffers who lost their jobs. Many have criticized the lack of open communication from Digital Railroad on this subject. In his statement, Mauzy says he made the tough decision to handle the layoffs "in one move, so that team members who remain and those who join will know that they are part of the future and do not need to constantly look over their shoulders."

He also expresses gratitude to past staff members, but defends the decision as necessary to support the shift in focus and conserve cash. Addressing the often-expressed concern that Digital Railroad may be running out of funds, Mauzy confirms that the company recently closed another financing round supported by its principal investors.

Digital Railroad is currently staffed with 27 full-time employees working in its Seattle headquarters and also in Chicago, Los Angeles, New York and London.

Copyright © 2008 Julia Dudnik Stern. The above article may not be copied, reproduced, excerpted or distributed in any manner without written permission from the author. All requests should be submitted to Selling Stock at 10319 Westlake Drive, Suite 162, Bethesda, MD 20817, phone 301-461-7627, e-mail: wvz@fpcubgbf.pbz


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