Lycos Europe is to axe 300 jobs in a bid to cut costs amid the slump in online ad sales.

It claims that the major restructuring will help it to slash its quarterly EBITDA (earnings before interest, tax, etc) losses from around E40 million (£25 million) to as little as E10 million (£6 million) by June next year.

Three countries - France, Germany and Sweden - will bear the losses. A spokeswoman for Lycos said no jobs would be lost in the UK as part of this restructuring.

Following the redundancies Lycos Europe - whose major shareholders include Bertelsmann/Gruner+Jahr and Terra Lycos - will employ just under 1,000 staff.

The portal outfit - which uses a black Labrador in its advertising - blamed its decision on the "disappointing development of the online advertising market".

In a bid to insulate it from further falls the company said it would look at creating new revenue sources. ®