NTT Communications Corp cuts operations back at Verio Inc.
📅 - Reuters reported today that NTT Communications Corp., Japan's top Internet services firm will slash more jobs at its US subsidiary, Verio Inc., and will consolidate its data centers to restructure operations. The company plans to lay off a quarter of its workforce, totaling 2,600 by the end of the year, and close approximately 10 of its 22 data centers.
This is the second round of layoffs for NTT Communications, a wholly owned subsidiary of Nippon Telegraph and Telephone Corp., since September. Less than six months ago Verio Inc. announced lay offs of about 750 employees and closed several data centers.
Reuters sources were quoted as saying, its all part of the company's ongoing plan to restructure business.
NTT Communications acquired Verio in September 2000 for $5.5 billion to assimilate their businesses of providing Internet hosting and data storage services and to globalize NTT Communications' services.
But as corporate demand and tech stocks dropped, so did Verio's value, and NTT was forced to book an extraordinary charge of 498 billion yen ($3.7 billion) in the first half through September to write down part of its investment. Now a losing enterprise, Verio must be reduced to 1,700-1,800 employees in order to become profitable by 2005, said a NTT Communications official.
This is the second round of layoffs for NTT Communications, a wholly owned subsidiary of Nippon Telegraph and Telephone Corp., since September. Less than six months ago Verio Inc. announced lay offs of about 750 employees and closed several data centers.
Reuters sources were quoted as saying, its all part of the company's ongoing plan to restructure business.
NTT Communications acquired Verio in September 2000 for $5.5 billion to assimilate their businesses of providing Internet hosting and data storage services and to globalize NTT Communications' services.
But as corporate demand and tech stocks dropped, so did Verio's value, and NTT was forced to book an extraordinary charge of 498 billion yen ($3.7 billion) in the first half through September to write down part of its investment. Now a losing enterprise, Verio must be reduced to 1,700-1,800 employees in order to become profitable by 2005, said a NTT Communications official.
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