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Earthlink cuts half its workforce

Workers pay for slack broadband strategy

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Financially-challenged US ISP Earthlink said on Tuesday it will slash about half its workforce after failing to ride the broadband wave Stateside.

The Atlanta-based firm will can 900 staff as part of a sweeping cost-cutting exercise. It also lowered its revenue predictions for the third time this year to between $1.19bn and $1.21bn.

Recently appointed CEO Rolla Huff opened up a can of management speak: "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." More cuts could be on the way, he added.

Earthlink is suffering as its dial-up hold outs finally make the switch to broadband from other providers. Its belated high-speed strategy was to involve itself heavily with municipal Wi-Fi projects, but that has stalled because of privacy and network quality concerns over its flagship San Francisco deployment. Chicago yesterday binned its plans for city-wide Wi-Fi through Earthlink because of the expense.

The firm's also been hit by heavy losses from a joint venture with the South Korean government called Helio.

Wall Street liked the plan, which Earthlink said will save between $25m and $35m this year. Shares rose 7 per cent on the news. ®

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