WebMD is going under the knife.
The once-hot Internet company announced a 14 percent cut to its staff yesterday as part of a plan to cut $45 million a year in expenses — a move it hopes will stanch the losses caused by limp advertising.
Shares of WebMD are off 59 percent this year as profits have turned to losses and revenue has fallen. They jumped 11.6 percent yesterday on news of the layoffs, to close at $15.45.
The website, led by CEO Cavan Redmond, warned investors of troubled times to come, which were blamed on trends in pharmaceutical advertising spending.
Revenue has declined in each of the past five quarters — including a 13 percent drop last quarter to $117.5 million.
Redmond announced yesterday the company would lay off 250 employees. The bulk of the job losses are believed to be in New York and Atlanta.
“Becoming leaner and more nimble will enable the company to extend our leadership in this highly dynamic and increasingly demanding marketplace,” Redmond said in a statement.
Most of the layoffs were expected to be implemented by the end of the year. In fact, employees started receiving the bad news yesterday, a source told The Post.
The drop in advertising revenue is the result, in part, the company said, on new regulations on drug companies and the rise of generic drugs as patents expire on designer brands.
Some in the industry say that WebMD created its own problems when it started selling advertising through an online bidding exchange rather than forging exclusive deals with advertisers.
WebMD began selling lower-profile ad space at reduced prices, and may have turned off top advertising partners that didn’t like seeing their high-priced ads alongside budget ad inventory, according to Robyn Beder, president of Net Margins Inc., which has sold ads on WebMD.