Grey Interactive became the latest e-business consultancy forced into restructuring as a result of the digital downturn, with the loss of 34 jobs from its 109-strong staff last week.
Some seven creatives have lost their jobs. The redundancies have been blamed on over-optimistic forecasts for the business.
Industry observers agree that the e-business sector began to falter around March last year, as the US tech market fell. High-profile dotcom failures have helped to depress both investment and confidence in the market.
In the UK, e-business groups such as Rubus, Icon Medialab and Razorfish have all cut jobs, although the broader digital media market has not been hit as badly.
“In line with many others in this sector, we have taken this action following a recognition of a shortfall in our anticipated workload for this year. Despite our blue-chip client base, we recognise that market conditions have had a dramatic impact on our industry. This has led to increased competitiveness for client attention and engagement,” says Grey Interactive managing director Brian Lee.
Lee says it remains important that the business is a profitable component of the Grey Group and that these changes will ensure its future contribution to it.
Lee adds that for the year ending 30 September 2000, the consultancy generated profits. It saw turnover increase 170 per cent to £5m over the period.