The announcement, yet to be made public, was made in an internal memo leaked to EPUK within hours of its release.

In it, joint Presidents Steve Davis and Anthony Rojas admit that it is “critical” for the company, which allegedly lost some $50 million in the last year, to make “significant changes”.

Crucially, they refer to Corbis’ need to pay it’s own way: presumably a reference to the fact that the company’s losses to date have been covered by Bill Gates, and perhaps an indication that the Microsoft founder is tiring of such a drain on his personal resources.

Davis and Rojas stress the need to consolidate acquisitions – picture agencies – they have acquired over the last few years, explaining that certain positions have “become redundant” – a phrase which will be undoubtedly familiar to many ex-employees of Sygma, and which will send a chill down the spine of employees at Corbis’ other acquisitions.

The memo reads:

From: Office of the President Sent:Friday, January 12, 2001 To: Corbis Bellevue, Corbis LA, Corbis NY, Corbis UK Subject: Changes at Corbis

As the CEOs of Corbis, we want to explain the layoffs today in our US and UK offices. We made these painful decisions after much deliberation and planning. As we reviewed our performance in 2000 and looked into the future, we knew it was critical for Corbis to make some significant changes to become a mature and healthy company.

Over the last few years we have done a great job demonstrating the strength of our one-stop-shop model, showing very strong revenue growth, acquiring many companies, building foundation systems and positioning ourselves as a leading global brand. Now we must really focus on our key financial opportunities and customers. We also must quickly integrate the various parts of the company into a more cohesive whole. And significantly enhance Corbis’ productivity around the world. We firmly believe these decisions will enable the company to better realize our vision, as well as reach our long-stated target of profitability by the end of 2002.

Since our founding, Corbis has been a leader in changing the way people communicate and share information by giving them the power of great photography coupled with state-of-the-art technologies. Ten years later, that vision has only become more exciting as we now are one of two global leaders in the world supplying business and individuals great photography and other content and products. We remain passionately committed to our leadership in the digital and photographic worlds – working with the world’s best photographers to provide customers the highest-quality, best-of-breed photography, collections, customer service and technologies under a comprehensive single-branded approach in the simplest way possible. Being smarter and more focused about how we operate our large global business in a very competitive market enables this vision to become reality.

Several people have asked whether profitability has become our vision. Profitability – or really being able to pay our own way and not rely on outside investment – is not a vision, but simply a requirement for a healthy company. We have targeted 2002 as our break even year for several years. Being profitable will enhance the company’s value and provide us with greater independence and opportunities for the future. In addition, our ability to achieve profitable growth and sustainability will enhance our short-term and long-term employee incentive programs.

As a result, the layoffs today stemmed from several inter-related decisions:

* Our new unified organizational structure. Under this plan, we have developed “shared service” departments, such as marketing, to increase consistency and focus, and lower costs. As we have decreased the size of internal teams, we will also be outsourcing services that were previously performed internally.

* Moving toward more digital solutions. For several years, we have been consistent in our view that the photography and media industries are becoming largely digital, and we have been working toward a 100% digital workflow for some time. In 2001, we are making large strides to that end. As a result, there are some positions that have become obsolete as we have less activity in creating, managing and distributing prints and transparencies.

* Consolidating acquisitions: We have acquired eleven companies over the past few years. As we work to consolidate these companies into an integrated whole, certain positions have become redundant or obsolete as activities are integrated or eliminated. Other companies adopting such similar consolidation and digital strategies, including our largest competitor, have witnessed much larger layoffs recently.

* Completing projects. This year we are wrapping up certain large, staff-intensive, projects, such as some foundation technology development and Keystone editing of the Bettmann collection, which were planned in our long-term strategic plan.

* Scaling back certain activities. We are cutting or scaling back some specific projects in order to focus on our most promising activities given the current markets. For example, we will rebuild our consumer internet activity with a smaller team given the market conditions in that area.

* Higher productivity performance. Corbis is considerably under industry averages in terms of revenues per person and some other productivity measures. We must improve our productivity, and our service to both photographers and customers, in order to remain competitive and healthy.

These decisions are the unfortunate part of the realities of growing a business such as ours. We have taken many steps to provide the best transition possible for departing employees, including separation pay and job search assistance through an outplacement firm.

For you, the other employees, we appreciate your support and help today. Please remember that Corbis continues to grow at an aggressive pace and is a very solid company in a great marketplace. Over the next couple of weeks, your manager will be providing you with a greater understanding of our 2001 plans, and your team’s role in achieving these goals.

We look forward to working with you over the coming year.

Steve Davis & Tony Rojas Office of the President