EarthLink axes 25 percent of staff

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Faced with growing competition and a tough economic environment, EarthLink Inc. is laying off 1,300 customer service and technical support personnel, comprising 25 percent of its staff.

The battered U.S. Internet service provider (ISP) said that it will be closing its call center locations in Seattle, Sacramento, Dallas and Pasadena, and will be rerouting the calls to its remaining call centers and outsource vendors, an EarthLink spokeswoman said Wednesday.

She added, however, that the cuts would not affect the company's level of customer service.

"This will be a seamless transition for customers," said EarthLink spokeswoman Carla Shaw.

Shaw said that the decision was aimed at streamlining operations and reducing costs given the tumultuous economic environment and mounting competition from rival ISPs.

The layoffs will begin to take effect on Feb. 21 and will continue over the next 30 days, she said.

News of the cuts emerged one day before the Atlanta, Georgia, company released its fourth-quarter 2002 earnings Wednesday morning, reporting narrower losses due to cost-cutting measures and increased revenue from high-speed access.

The company reported a quarterly net loss of US$32.9 million, or $0.24 a share, on revenue of $347.9 million. This compares to $73.9 million, or $0.55 a share, for the year-ago quarter, on revenue of $327.2 million.

While EarthLink said that it was able to pare its losses by adding almost 100,000 new broadband clients during the quarter, the ISP still faces a long road to profitability.

Looking ahead, the company predicted a net loss of between $86 million and $106 million for 2003. While the job cuts this week will trim operational costs, the ISP said it is banking on gaining even more broadband customers by taking advantage of its ability to deploy nationwide DSL, cable and satellite access.

This story, "EarthLink axes 25 percent of staff" was originally published by PCWorld.

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