Beijing Business Today, 7/04/08
Former employees in Focus Media (Nasdaq: FMCN) subsidiary Focus Wireless confirmed that some executives and employees of the company have been dismissed. The company has laid off a total of over 200 employees in marketing, sales, media research, 3G business, and other departments. One employee said that "the fundamental reason for the cuts is that Focus Media is heavily focused on its share price and wants to boost short-term profits". He added that the Sichuan Wenchuan earthquake influenced many of Focus Media's advertising clients' budgets, likely causing the company's income to drop; meanwhile, the company must sign contracts with building developers again soon, which may increase costs.
Reportedly, some among those upper level executives who had been dismissed are now preparing to establish a new company, which will provide location-based lifestyle information services. These executives are now in talks with several venture capital firms.
Editor's Note: After Focus Wireless's spam SMS scandal was broadcast on CCTV on March 15, the company quickly halted SMS services, began a 3-month business restructuring, and turned its focus mainly to WAP advertising. The company officially launched a wireless marketing platform "Focus Lanhai (Blue Ocean)" last month.