WebMD to Slash 14% of Workforce in Overhaul

By FOXBusiness

WebMD (NASDAQ:WBMD) is cutting roughly 14% of its workforce in an effort to slash some $45 million in annual costs and streamline the business.

The New York-based online health network said Monday it will axe 250 positions, a move that provides it increased flexibility to better focus on user engagement, driving innovation and improving the customer experience.

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The popular website for looking up information about general health and diseases most recently had about 1,700 employees, according to Thomson Reuters data.

Most of the workforce reductions will be effective at the end of the year and WebMD said it will realize additional cost savings in the first quarter of 2013.

“Becoming leaner and more nimble will enable the company to extend our leadership in this highly dynamic and increasingly demanding marketplace,” WebMD CEO Cavan Redmond said in a statement.

WebMD anticipates a pre-tax restructuring charge of $6 million to $8 million mostly related to severance, which it will record in the fourth quarter of 2012.

As part of the program, it will streamline sales and delivery processes, enabling better collaboration with sponsor and agency clients.

“Across the entire company, there will be a sharper focus on prioritizing resources and investment to key areas of future growth,” said Redmond, a former Pfizer (NYSE:PFE) executive who joined WebMD earlier this year.

Shares of WebMD climbed more than 5% to $14.59 Tuesday morning following the announcement, though they remain down about 60% from January.

The company reported a quarterly loss in November and said revenue slumped 13%.