Audible Cuts Workforce by 40%

Posted on July 25, 2001

Audible Inc., a provider of spoken audio content, has announced a plan to streamline operations and significantly reduce its cash needs. The new plan includes the elimination of 35 jobs or approximately 40% of the workforce. The company expects current quarterly cash consumption rates to be radically reduced by the 4th quarter of this year without affecting Audible's current growth rates.

``Audible has consistently met or exceeded operating and cash use expectations, but it is plainly not prudent to wait for the capital markets environment to improve enough to allow us to execute our original financial plan,'' noted Donald Katz, chairman and founder of Audible. ``This new operating plan, which will accelerate our drive to profitability, is the right thing to do in terms of Audible's financial position. We expect to continue to provide tremendous value to our customers, while we continuously expand our customer base and serve our many content, technology, and distribution partners.

``Unfortunately,'' contined Katz, ``the plan is attended by painful consequences. One of the main reasons we can significantly reduce our operating costs while maintaining our high level of service and leadership of the new industry of digital media distribution, is the level of efficiency, intelligence, and creativity built into our systems by many of the people now leaving us. It is difficult to express my appreciation for the hard work, loyalty, and friendship of the 35 individuals who are leaving Audible.''

The operating plan includes employee departures from all ranks of the company, and as part of this, the company announced several significant management changes. Thomas Baxter will resign from his current Chief Executive Officer position. Mr. Baxter will remain on the Board of Directors and serve as a senior advisor to Audible's management team. Donald Katz, founder and chairman, will reassume the CEO title he held from the company's inception in 1995 until late 1998, and again from late 1999 to February 2000. Audible also announced that Robert O. Kramer, 42, current Chief Technology Officer, and a veteran senior executive with American Management Systems (AMS) before joining Audible in early 2000, will become president of the company.