May, 2002 : Genuity to Cut Staff, May Consolidate Data Centers

📅 May 2, 2002 - Managed Internet infrastructure and hosting firm Genuity (genuity.com) said today it would cut between 27 and 29 percent of its staff in Q2 as part of a new company-wide restructuring program.

The announcement was made in conjunction with the company's quarterly report, which was in line with the company's previous guidance.
Genuity said it planned to eliminate between 1,100 and 1,200 positions as it continued to respond "to the challenges presented by the continued contraction of IT spending and our ability to profitably grow revenues," the company said in a release.
"Notwithstanding the progress to date, it is important for us to help ensure that we meet our financial objectives in this difficult environment and, as such, we are today announcing additional actions to enable Genuity to further reduce costs and meet our financial and operational goals, including further headcount reductions and reductions in capital spending," said Paul Gudonis, Genuity's chairman and CEO.
Genuity also said it was evaluating the possibility of further consolidating a number of data centers and administrative offices in an effort to "improve its overall asset utilization and eliminate business offerings not core to its strategic goals." The company has already exited the professional services business in France, Italy and Spain, and said it is currently evaluating the profitability potential of all international operations.
Lowered IT spending has also continued to heavily affect Genuity's managed hosting business, according to its quarterly report. "Managed Web Hosting and value-added services revenue continued to be heavily impacted by the overall slower economic environment, resulting in a widespread reduction in IT spending and ongoing customer churn," the report said. "Revenue in this segment declined 2 percent from the previous quarter and 33 percent from the prior year quarter."