EarthLink will cut almost half of its work force before the end of the year

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.

"Paying an extra $500 for a computer in this environment -- same piece of hardware -- paying $500 more to get a logo on it? I think that's a more challenging proposition for the average person than it used to be." -- Steve Ballmer
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