WebMD Health Corp. (WBMD:US), the online provider of medical information, will eliminate 250 jobs in a cost-cutting measure designed to deal with a decline in drug- company advertising.
The positions represent 14 percent of the company’s workforce and are part of a broader effort expected to reduce operating expenses by about $45 million a year, WebMD said in a statement today. The New York-based company said it plans to take a pretax restructuring charge of $6 million to $8 million in this year’s fourth quarter.
WebMD generates most of its revenue (WBMD:US) from ads and sponsorships, and said in July that business would probably suffer as drugmakers face patent expirations and delayed products. The information company’s shares had fallen 63 percent this year through yesterday.
“Becoming leaner and more nimble will enable the company to extend our leadership in this highly dynamic and increasingly demanding marketplace,” Chief Executive Officer Cavan Redmond said in today’s statement. “Anticipated changes in U.S. health- care will provide meaningful new opportunities to link the needs of patients, consumers and health-care professionals to enable them to navigate their care.”
WebMD rose 12 percent to $15.45 at the close in New York, valuing the company at about $773 million. The information provider said in a January regulatory filing that it had broken off talks with potential buyers after concluding that any offers would be less than its market value.
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