Clearwire Corp. shares had dropped more than 11 percent on Friday as investors reacted to the WiMAX providers planned employee and expansion cuts, as well as fears over its ability to land more financing.
Clearwire is slashing 15 percent of its work force, suspending the 4G launch in Denver, Miami and other markets, and reducing marketing and sales costs, the company said on Thursday. The layoffs will affect about 380 people. The drastic measures are expected to save between $100 million and $200 million this year, and a similar amount in 2011s first half, Clearwire said.
At the same time, Clearwire is looking into financing options, including a debt sale, as it faces a year-end cash crunch due to high network construction expenses. The carrier has $1.4 billion in cash and investments for the remainder of this year, but plans to spend $3.3 billion on buildouts over the next two months.
Several analysts have downgraded Clearwires outlook over the problems, and questioned Clearwires relationship with wireless operator Sprint Nextel. They fear Sprint may be eating too much of Clearwires potential subscriber base.
On Thursday, Clearwire reported higher quarterly losses of $139.4 million, compared to $82.4 million a year earlier. Revenue, though, more than doubled to $147 million.
Shares of Clearwire had fallen 11.44 percent by 12:22 p.m. Eastern, to $6.35.