EarthLink announced it will cut its workforce by almost 50
percent, citing industry change and new venture issues as two of the main
reasons behind the decision. The 900 job cuts and four office closures
should be completed by the end of 2007. It is possible more job cuts could be
announced before the end of the year.
According to a blog published on Wired, the job eliminations are not going as smoothly as all
parties would like.
CEO Rolla Huff said the company must now refocus and may head in a new
direction to bounce back; however, EarthLink plans to keep promoting the Helio
mobile phone service. Helio lost at least $40 million USD last quarter
according to financial results and EarthLink has already spent roughly $100
million USD on the project.
Even though EarthLink continues to roll out new services for consumers, the
company still has problems
finding steady revenue streams outside of its broadband subscriptions.
EarthLink warned investors that it may be difficult to continue to recruit new
subscribers in 2008.
EarthLink will no longer be able to offer the city of San
Francisco citywide WiFi, an initiative the company was working alongside
Google to launch. EarthLink will also pay the city of Houston a $5
million fee after failing to build the city's WiFi network as scheduled.
Chicago stopped talks with EarthLink after being told the price of network
infrastructure would have to be raised.
quote: the job eliminations are not going as smoothly as all parties would like.