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Kozmo.com Ceases Operations, Fires Entire 1,100-Person Staff

12 Apr, 2001 By: Hive News

Kozmo.com Inc., a delivery service for snacks, videos and other items ordered over the Internet, said it's closing its operations and firing all 1,100 employees, according to Bloomberg News.

The company's Web site ceased operations late Wednesday and the company said it's no longer making deliveries to consumers in the nine cities that it served, said company spokeswoman Stephanie Cohen Glass. Most of Kozmo.com workers were delivery staff or worked at the New York-based company's 16 distribution centers.

The company, which began operations in 1998 and is known for orange-suited delivery people, said recent talks of a possible merger with Los Angeles-based online grocer PDQuick ended without an agreement after funding failed. Kozmo.com then considered either putting itself up for sale or reducing operations to serve fewer cities.

Cohen Glass declined to comment on how much money the company has left.

"The board decided that we could close," Cohen Glass said. "We have enough money to take care of our employees and pay our creditors. This is not a bankruptcy. We will also liquidate our assets."

Kozmo.com said in the past year it had expanded its product line to include prepared meals, flowers, groceries and specialty items, which helped boosts its membership to 400,000 from 150,000. The size of an average order size grew to $25 from $10 in July and in December the company had a profit at operations in Boston, New York and San Francisco.

(Source: Bloomberg News)

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