Website Restructure - Good or Bad for SEO?

[Trupanion]

Due to the fact that we aren't in the #1 position, (dropped from #5 to page 2 - You have to love Devs and IT), our heads have hired a SEO Audit/Consultant company to review everything we are doing.

I would like to post some of the things they are telling us to do, in which I don't 100% agree with  and would like some other professional feedback.  Especially since their site isn't marketed very well.

http://www.trupanionpetinsurance.com Disclaimer: (this site was a complete nightmare when I started a year and a half ago. Yes, there are many issues that still need to be addressed.)

Website Restructure

I agree we totally need to restructure our website.  I have no idea what the previous SEO guy was thinking.  The new SEO company is telling us that the structure is a big part of SEO.

1. I don't believe so, but besides a little loss in 301 juice, is there any other downfalls?
2. Are there any real benefits?

Similar question asked the other day (and answered by me): http://www.seomoz.org/q/don-t-want-to-lose-page-rank-what-s-the-best-way-to-restructure-a-url-other-than-a-301-redirect

[brycebertola]

Our site is doing the same. EZWatch-Security-Cameras.com

Restructuring allows you to organize your content into "Silos" and eliminate some of the unnecessary links through JSON objects, iframes, and nofollows (some debate there on which is optimal).

The Downfalls: There will probably be a 30-90 day dip in traffic but if you do page-to-page 301's it won't hurt nearly as much. Anytime you change URL's you are likely to see some inbound links drop off, but that happens when the pages don't change, so it's going to be minimal. Sure, 301's might drop some of your PR during transfer, but only a minimal amount according to matt cutts.

The Benefits:  Organizing your content into silos and pruning cross-category links will allow you to control the flow of pagerank and anchor text much more effectively. Bruce Clay has a huge amount of resources on this, and they even cover it on their blog.

Will it be painful? Yes.

Will it be worth it? Yes.