Staff at internet company Quote and Buy have taken pay cuts rumoured to be up to 50% of their salaries as the company tries to secure more funding.
Quote and Buy's managing director James Green admitted that a number of people had taken temporary cuts in salary. But he refused to comment on the extent of the pay cuts.
He said: “Some have taken none at all and some of the directors have taken substantially more.”
Green said the move was only for four or five weeks, adding: “It is purely prudent business management.” He said the company was looking for further financing following expansion.
Green said a number of companies had approached Quote and Buy regarding funding, and the company was currently in talks.
He was bullish about the company's position, saying: “Things are looking excellent in a whole range of ways.” The company had more than 90 brokers, Green said, and an intranet site was scheduled to be launched in July.
But an industry commentator said he foresaw problems for companies working on application service provider (ASP) models. “The types of brokers being attracted by these types of models are at the smaller end of the market,” he said. “They do not generate the volumes of transactions required to provide a revenue stream sufficient to support the ASP operations and development costs.”
Quote and Buy charges for its service on a transactional basis with
brokers paying 20% to 50% of their commission, depending on the volume of business. Motor insurance is currently available from a panel of ten insurers. Planned future launches include travel, boat, student, pet, home and contents, commercial lines and personal accident insurance.
Quote and Buy said in January that these categories would be up and running within a few weeks. Its site now gives an anticipated launch time of “summer 2001”.