Launch Media Cuts Staff by 26% After Fees Drop

Launch Media Inc. cut its staff by 26%, or 60 employees, just before announcing a sharp drop in quarterly results. The company also disclosed that it has nearly completed a deal with an undisclosed investor to obtain $5 million in funding. Santa Monica-based Launch distributes music through personalized online radio stations and CD samplers, which it supports through advertising and licensing fees. Those fees fell to $3.8 million in the first three months of 2001, down from nearly $8 million the previous quarter and $6.4 million a year ago.

The company reported net losses of $14.1 million in the quarter, compared with $11.9 million in the first quarter of 2000. Excluding one-time charges, its operating losses were $12.6 million, down from $13.2 million the previous year.

Company officials said the new investment, along with its dwindling cash supplies, would help Launch make it through the third quarter of 2001. Shares of the company’s stock closed at 50 cents, down 2 cents, on Nasdaq.