(From the AP via the Chron)
Internet service provider EarthLink announced a plan today to cut 900 jobs, or about half its work force, and close four offices as part of a restructuring plan aimed at reducing operating costs.
The restructuring by the company, which has a contract to build a city-wide wireless network in Houston, will begin immediately and be completed by the end of the year, said Rolla P. Huff, the Atlanta-based company's president and chief executive. More cuts could be announced before the year's end, he said.
"While we see this as an important first step in unlocking the underlying value that we believe is in our company, we are only eight weeks into the process of repositioning EarthLink for the future," he said. "These changes get our cost structure in line, but there is much more to do."
There was no immediate word on how the restructuring would affect the Houston project, which has been stalled for months.
The company declined to comment on deals with specific cities, but EarthLink spokesman Jerry Grasso said they plan to discuss with each city where they are doing business the need for the city government to serve as the company's primary customer. Houston's contract is already based around that model.
"We will be talking to each city on an individual basis to discuss the needed changes in our new business model, which includes them stepping up to some sort of anchor tenancy agreement," he said.
Grasso also confirmed that Donald Berryman, who had been overseeing the Houston project as the president of EarthLink Municipal Networks, has left the company.
It's never a good sign when the project manager, and the head of the Business Unit in charge of the build out, has left the company.
Political spin coming in 3....2....1......
MORE: Abort! Abort! Abort!...
Other Eyes:
First: an 'aye'
Dwight Silverman: Earthlink Wi-Fi: Waiting for the other shoe to drop.
Second: a 'nay'
BlogHouston: Earthlink cuts jobs, has no comment on delayed Wi-fi buildout.
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