May 10, 2001 : Exodus to Cut 675 Jobs
📅 - Exodus Communications Inc., a leading Web hosting company, announced on Wednesday that it planned to cut about 15 percent of its work force, totaling about 675 jobs, in a continued effort to control costs in the face of steep losses and the falloff in technology spending among businesses.
The company, based in Santa Clara, California, says the cuts will generate a $10 million restructuring charge, and trim the Web host's staff from about 4,500 to about 3,800 people.
Exodus says it believes it can achieve its financial plan by reorganizing and strengthening its operations, adding that the staff reductions are consistent with that goal.
The company first announced its plans to cut costs in April, when it posted a first quarter net loss of $650 million, or $1.21 per share, almost ten times that of the previous year's first quarter. Exodus also scaled back its revenue predictions for this year from $1.9 billion to between $1.5 billion and $1.6 billion. The company also said it would reduce capital spending for the year by $300 million.
The new cutbacks came just a week after a reshuffling of the company's top ranks, which included the April 30th resignation of Exodus's chief financial officer, and the departure of its president and chief operating officer as well as its chief marketing officer the next day.
Despite the job cuts, Exodus says it will continue to expand the worldwide reach of its operations, continuing with the opening of an Internet data center in Paris next week. Last month the company opened facilities in Dallas and Amsterdam.
The company's stock has fallen more than 89% from its all-time high closing price of $86.66 on March 24, 2000, to under $10. The hard times the company is facing have raised questions with analysts as to whether Exodus will be able to complete its ongoing merger with rival GlobalCenter.
The company, based in Santa Clara, California, says the cuts will generate a $10 million restructuring charge, and trim the Web host's staff from about 4,500 to about 3,800 people.
Exodus says it believes it can achieve its financial plan by reorganizing and strengthening its operations, adding that the staff reductions are consistent with that goal.
The company first announced its plans to cut costs in April, when it posted a first quarter net loss of $650 million, or $1.21 per share, almost ten times that of the previous year's first quarter. Exodus also scaled back its revenue predictions for this year from $1.9 billion to between $1.5 billion and $1.6 billion. The company also said it would reduce capital spending for the year by $300 million.
The new cutbacks came just a week after a reshuffling of the company's top ranks, which included the April 30th resignation of Exodus's chief financial officer, and the departure of its president and chief operating officer as well as its chief marketing officer the next day.
Despite the job cuts, Exodus says it will continue to expand the worldwide reach of its operations, continuing with the opening of an Internet data center in Paris next week. Last month the company opened facilities in Dallas and Amsterdam.
The company's stock has fallen more than 89% from its all-time high closing price of $86.66 on March 24, 2000, to under $10. The hard times the company is facing have raised questions with analysts as to whether Exodus will be able to complete its ongoing merger with rival GlobalCenter.
Reads: 1742 | Category: General | Source: TheWHIR : Web Host Industry Reviews
URL source: http://www.thewhir.com/marketwatch/exodus510.cfm
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