ISP Covad Cuts Work Force
SANTA CLARA, Calif. (AP) _ Covad Communications, a provider of high-speed Internet access, said Monday it will reduce operational spending and cut about 400 jobs, or 13 percent of its work force.
The company also said it will hold expansion of its nationwide network to just over 2,000 central offices and will cancel the build out of its third operations facility in Alpharetta, Ga.
The job reductions and other cost-cutting measures are expected to result in savings of 20 percent to 30 percent for the year 2001, the company said.
The announcement comes a month after the company reported a wider-than-expected third-quarter loss of $189.9 million, or $1.22 a share. Robert E. Knowling Jr. resigned as the company’s chief executive after the disappointing quarterly results caused the company’s stock to plummet.
The job cuts will be in various facilities throughout the United States, including major offices in Santa Clara, Calif., Denver, Atlanta and Manassas, Va.
Covad is one of the leading providers of digital subscriber lines, or DSL, a service that sends digital signals over copper phone wires. The technology speeds up Internet downloads at least tenfold over dial-up modems, while at the same time leaving the phone free for regular calls.
The company blamed its third-quarter loss on nine of its Internet service provider customers, who did not pay bills totaling $11.4 million. The company’s shares have since tumbled from a 52-week high of $66.66 in March. Its stock closed down 16 cents to $2.72 on Monday on the Nasdaq Stock Market.