Cash strapped online entertainment network K*Grind has given its entire content provision workforce its walking papers, and has closed down its flagship youth Web portal.
The mass sacking arrived just one week after K*Grind founding CEO Jon Peters resigned from his position and left the company. Former chief operating officer David Keane will assume the role of CEO, the company said in a statement issued this afternoon.
Keane confirmed that 39 staff involved in content creation, marketing and online radio were made redundant on Friday last week.
The sacking also comes three weeks after the company was saved from expected bankruptcy by Asian investors MetroLand and UPL, who took a 51 per cent controlling stake in the company. The company had burnt through an intial $10 million investment from Macquarie Technology Funds Management, AMWIN and computer manufacturer Acer, amongst others - in under 10 months.
One retrenched employee said K*Grind employees were warned around two weeks ago that they would soon be made redundant.
"We were told (two weeks ago) the website won't continue," the former employee said.
Keane said the dismantling of the company's content management division was representative of the company's new profit-centric direction under the helm of Metroland and UPL. In fact, newly appointed sales and marketing director Gary Lewis predicted the company would be operating profitably by the end of this financial year.
Lewis said the company would no longer target the youth content market spefically.
"The only people making any money out of the Net are the people in the middle," Lewis said.
Keane said the retrenchments would be counterbalanced by likely expansions within the company's technology services divisions.