EarthLink Inc. said on Tuesday it will cut 900 jobs and close four offices because it needs to reduce operating costs.
The companys stock was up 48 cents on the news, closing at $7.34.
The loss of 900 employees represents about half of EarthLinks work force. EarthLink is closing its offices in Harrisburg, Penn., Knoxville, Tenn., Orlando, Fla., and San Francisco.
Despite the layoffs, the company has hired a new COO, Joe Wentzel.
EarthLink also revised its third-quarter and full-year revenue projections. It now expects to bring in $290 million to $300 million in the third quarter. For all of 2007, EarthLink expects revenue of $1.19 billion to $1.21 billion and 3.9 million subscribers. In terms of customers, the company predicts it will add fewer new subscribers next year and said it wont take any that do not yield a positive lifetime value for our shareholders, according to a news release.
Meanwhile, EarthLinks board has authorized the purchase of $200 million outstanding shares of the companys common stock. That gives EarthLink $270 million to buy common stock.
These changes get our cost structure in line, but there is much more to do, said Rolla Huff, president and CEO of EarthLink, in a news release. We expect to announce additional steps as we continue our work over the coming weeks and months.
EarthLink Inc. www.earthlink.net