Jul, 2001 : StorageNetworks to Slash One-Third of Staff

📅 July 21, 2001 - StorageNetworks, Inc. (storagenetworks.com), a leadingprovider of data storage management services, reduce 33 percent of its staffafter reporting a second-quarter loss, due to slowed demand.

The company reported an EBITDA loss (net loss before interest, taxes,depreciation, amortization and non-cash stock compensation) of $18.2million, as well as a net loss of $32.2 million, or $0.33 per share.
The company said cutting 220 jobs from its staff of 670 would save thestart-up firm about $5 million a quarter.
"In some ways this is very challenging time in the economy, but we feel veryfortunate that we're more than fully funded to reach our profitabilitytargets," Chief Executive Peter Bell told Reuters.
The company also reported a rise in second-quarter revenue of 23 percent to$33.4 million from $27.1 million in the first quarter.
"Despite this quarter's strong financial performance, signing of key newcustomers, immediate traction of our newest service offering STORfusion, andthe interest our services are receiving in enterprise companies, we aredisappointed at the speed of which new bookings are occurring," continuedBell. "We recognize that the challengingmacroeconomic environment has caused a worldwide slowdown in informationtechnology spending."
The company projects that revenues for 2001 will be between $120 million and$127 million, an 18 percent drop from the previous prediction.
However, executives at StorageNetworks remain confident that they will beable to ride out the downturn in tech spending.
"With the organizational changes we are making, we feel we have the focus,strong balance sheet and innovative software platform to deliver world-classservices to enterprise customers, ultimately driving shareholder value,"Bell said.