And Earthlink Cuts 900 Jobs

16 Comments

As we had reported earlier, Earthlink (ENLK) announced a major restructuring. They will hold a conference call tomorrow morning. According to their news release, they are going to shut down many satellite offices and about 900 people will lose their jobs. As a result of the corporate restructuring, EarthLink expects to generate $25 – $35 million in cost savings through the remainder of 2007.

These changes get our cost structure in line, but there is much more to do,” said Rolla P. Huff, EarthLink President and CEO. “We expect to announce additional steps as we continue our work over the coming weeks and months.”

The worst isn’t over it seems for the company:

Given current trends in the Internet access industry, management expects industry-wide gross subscriber additions to decelerate in 2008. This will result in fewer gross subscriber additions for EarthLink as it will no longer add new subscribers that do not yield a positive lifetime value for our shareholders. Additionally, as subscriber growth slows, the company expects to realize fewer migrations from narrowband to broadband.

16 Comments

Daniel Golding

These guys are the living dead. The dialup ISP biz is shrinking and Earthlink blew any chance of re-inventing themselves with bad bets on reselling DSL and ill-advised muni wireless schemes. They should have concentrated on their hosting and content businesses, or just sold themselves off.

Hutch

Didn’t even realize these blokes are still around? Sheesh, even NetZero is still kicking around. Will wonders never cease…

Nathan Gilliatt

Sounds like the wholesale access model isn’t working for them. Avoiding money-losing customers, fewer BB migrations, milking the longer-tenured customers (who pay higher monthly rates). Inspires me to accelerate the migration from mindspring.com to my own domain.

Rajeev

Are they planning to maintain their Muni biz? I’m sure Tropos would be keeping their fingers crossed

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