As expected, EarthLink announced late yesterday that it would cut 900 jobs, which is nearly 50 percent of its workforce, to reduce operating costs. EarthLink's CEO Rolla Huff said the company plans to make further cost savings announcements before the end of the year, but no more job cuts are expected. EarthLink plans to close down its offices in Orlando, Fla.; Knoxville, Tenn.; Harrisburg, Penn.; and San Francisco. The company also said it would repurchase $200 million of its stock as part of the plan. Because of the restructuring, the company said it expects to save between $25 million and $35 million by year-end.
''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,'' Huff said. ''These changes get our cost structure in line, but there is much more to do.''
Speculation is swirling over whether EarthLink will cut its losses with its MVNO Helio, which it co-owns with SK Telekom. The MVNO has been a consistent drag on the company's quarterly earnings and just required an additional $30 million in funding from each of its parents.
For more on EarthLink's restructuring:
- check out this press release
- read this article from the AP
- Take our poll on EarthLink's next move...ÂÂÂ
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