Velti, one of the leading mobile advertising and marketing technology firms worldwide, on April 30 cut an estimated 200 to 250 employees from its workforce a couple of weeks ahead of its first-quarter earnings call on May 13.

The drastic cull, said to be the second this year and almost one-fifth of its staff including new hires and senior employees, comes as Nasdaq-listed Velti struggles to hold up its stock price, which went from a high of $10.91 to a low of $1.53 in the past 52 weeks.

The Velti plc stock closed at $2.11 yesterday, with a total market cap of $135 million.

Major drubbing
Wall Street has pummeled Velti for results that came in way below analysts? expectations.

Listed offshore in Jersey in the British Isles, Velti is projecting sales of $255 million to $280 million for 2013, downgraded from $399 million.

The company posted 2012 sales of $270 million, up 43 percent from fiscal 2011 and split four-fifths between mobile marketing services and the rest ? $54.3 million ? from mobile advertising.

Velti is said to have disappointed with poor fourth-quarter sales for last fiscal year. The fourth quarter is when budgets are allocated for the next year, so a weak performance in that period affects revenue for the ensuing 52 weeks.

The company announced a fourth-quarter adjusted loss of 39 cents per share, while analysts expected a profit of 59 cents per share.

Turmoil in Greece ? the home country of Velti cofounder and CEO Alex Moukas ? and the Middle East is said to have affected the company?s bottom line. It is said to be shedding clients in those regions, one battling from inability to pay national debts and another grappling with revolutions and civil wars.

An all-hands call on Tuesday, April 30 broke the payroll-cull news to Velti staff, including those working out of offices in San Francisco, Palo Alto, CA, New York, London and Athens.

Word has it that Velti may even move out of new digs in San Francisco as part of a cost-cutting measure, but this was not confirmed.

An email inquiry to Velti chief financial officer Jeffrey Ross and investor relations executive Leslie Green regarding the staff redundancies was not answered.

Cofounder leaves
The payroll cutbacks come weeks after Velti cofounder and chief operating officer Chris Kaskavelis stepped down. The March 29 email memo, headlined ?Chris Kaskavelis Parting Note,? said:

?I am saddened to announce that after co-founding and leading the company for 13 years, Chris Kaskavelis, our COO, is stepping down. Mari Baker, one of our non-executive board directors, will be stepping-in in an interim basis, while we conduct a search for a new COO.

?Chris was a guiding force when we came up with the idea of Velti during our Boston days in early 2000. His vision helped create Velti, and enabled it to grow globally it [sic] into the worldwide organization it is today. He was a key driver of our our expansion into new markets, products and geographies. As a co-founder and key shareholder, Chris remains committed to Velti?s growth and success. We will continue to depend upon and value his expertise, and will be working with him as we transition to a new COO.

?Mari joins us as interim COO from her position as a member of our board since 2011. She brings to us executive experience at companies including Playfirst, BabyCenter, LLC/Johnson & Johnson, and Intuit. We look forward to working with her as we continue our progress towards achieving key goals company-wide and transforming the business.?

A new permanent chief operating officer has not been named.

While many Velti staff were aware of the cuts looming, some were shocked by the depth and size. Some took packages, while others were let go ? across all departments, including Velti Media, a new buy-side mobile ad network that is set to go head-to-head with rivals Google, Millennial Media, Apple and a few others.

Velti?s mGage platform also competes with Hipcricket, one of the key players in the space.

Another service, the sell-side Mobclix, lets app developers and publishers offer inventory via real-time bidding auctions to advertisers looking to buy media space and time.

Velti also owns Casee, a mobile ad network in China.

Curse of the CPM
Analysts and investors who follow Velti (VELT on NasdaqGS) have been quite harsh on the company?s performance, criticizing leadership. Even Mr. Moukas? decision to hire new CFO Mr. Ross to bring in fresh blood was not credited.

In general, mobile advertising stocks in a pool of marketing services firms are amongst the worst performers on the stock markets ? a surprising development given that mobile advertising and marketing use is on the upswing.

Increased commoditization of mobile advertising and marketing services is a key issue in the industry, as is the growing practice of marketers taking mobile services in-house.

Another troubling point for mobile ad firms to consider is low CPMs ? cost-per-thousand impressions ? on mobile, $1.31 versus the average $4.70 for PC-based Web advertising, per eMarketer.

Not surprisingly, such low CPM rates deliver anemic profit margins to companies offering mobile advertising services ranging from platform use to ad placement in media.

Velti?s woes have not prevented it from announcing a slew of deals.

In April alone ? and days after launching Velti Media ? the company agreed to power for two years all mobile services across Bauer Media Group UK?s 43 radio stations, tie up with [x+1] to add mobile messaging to its platform and ally with BlueKai to develop mobile data-driven audiences for brands.

Amidst all this activity in April, Velti sold 16.53 million ordinary shares at $1.50 apiece to raise $24.8 million toward a $16.5 million deferred financing of MIG, a November 2011 acquisition. The proceeds will also be allocated for research and development of its technology offerings, working capital and general corporate purposes, according to the company.

Millennial Media lowers Q1 loss, ups revenue
Meanwhile, Millennial Media showed growth in its first-quarter revenue, per an earnings call yesterday.

Millennial Media first-quarter revenue rose to $49.4 million from $32.9 million for the year-ago period, with a year-over-year increase of 50.1 percent.

Also, first-quarter gross margin grew to 41.6 percent from 39.5 percent in the year-ago time frame.

However, first-quarter net loss on a GAAP basis was $3.8 million, slightly less than a net loss of $4 million for the first quarter of last year.

Millennial Media projects total revenue for the second quarter to be in the range of $58 million to $60 million, with adjusted EBITDA to be between a loss of $500,000 and $1.5 million for the period.

The Baltimore, MD-based mobile ad network stuck by previous guidance that it anticipates 2013 revenue to be in the range of $270 million to $280 million, with adjusted EBITDA to be between $17 million and $18 million.

Millennial Media?s (MM) share price on the New York Stock Exchange has swung from a low of $5.87 to a high of $18.09 in the past 52 weeks. The stock was listed at $7.50 at day?s closing yesterday.