NEW YORK -- Online delivery service Kozmo.com said Wednesday it has shut down its website and will cease operations in all of its markets. Nearly 1,100 workers will be laid off.
The privately held New York company said the closing was effective immediately. The company's website didn't load and a phone number for Kozmo was unable to accept any calls.
Stephanie Cohen Glass, Kozmo's director of communications, said the shutdown was immediate. She said all 1,100 Kozmo workers will be told of the decision Thursday.
"We've contacted a liquidator who will be liquidating the company's property," she said. "We will be paying our creditors. This is not a bankruptcy."
Glass said some of the company's workers will receive a severance package, but declined to say how many will get one or how much it will be.
Kozmo launched in 1998 on the premise of delivering goods ordered over the Internet, including flowers, groceries and other items. Its membership rose to 400,000.
Earlier this year, Kozmo said it was gearing up for a more conventional approach, including a print catalog, to sell its products.
Kozmo operated in Atlanta, Boston, Chicago, Los Angeles, New York, Portland, San Francisco, Seattle and Washington, D.C.
Glass said the company even turned a profit in December in Boston, New York and San Francisco.
"Given more time and more hospitable market conditions, Kozmo would have succeeded in rounding the corner and would have continued to grow," said Gerry Burdo, president and chief executive of Kozmo. "However, some decisions made early in the company's development combined with current market conditions prevented Kozmo from overcoming the challenges associated with conquering the last mile."
Burdo was named CEO last summer.
