- The Washington Times - Saturday, September 29, 2001

Net2000 Communications Inc. yesterday laid off 335 workers, about 30 percent of its work force, and said it expects third-quarter revenue to be 27.5 percent lower than previous forecasts.
"While it's extremely difficult to let go of hard-working, good people, we have taken steps to enable Net2000 to be a more nimble company and to intensify our focus on further penetrating the existing markets where we already have many marquee customers," Net2000 co-founder and Chief Executive Charlie Thomas said.
Net2000, an 8-year-old company in Herndon, Va., is a competitive local-exchange carrier marketing telecommunications services to businesses.
Many competitive local-exchange carriers have been beset by heavy debt and limited access to capital since last year. Net2000 had $98 million in long-term debt in July. The Telecommunications Act of 1996 was supposed to help new phone companies by spurring competition, but few have been able to chip away at the domination of Baby Bells such as Verizon Communications Inc.
Layoffs yesterday at Net2000 were the second this year. The company let 90 workers go in January. The company has trimmed its work force to 632.
The company will close its Philadelphia sales office. That will leave the company with sales offices and network-operations facilities in eight U.S. cities in the Northeast and Mid-Atlantic.
Net2000 will take an $8.5 million third-quarter restructuring charge. But it expects to save $6 million in the fourth quarter from the restructuring.
Third-quarter revenue will reach $29 million, rather than the $40 million previously forecast. Despite the lower forecast, third-quarter revenue will exceed last year's third-quarter revenue by 80 percent. Revenue for the year will amount to $112 million, down from the $147 million previously forecast.
"We're still growing; it's just a matter of revising our revenue targets," Net2000 spokeswoman Gerry Simone said.
A weak economy is causing customers to spend less, the company said.
"We felt it was essential to take measures to reduce spending going forward as a result of the current economic environment," Net2000 Chief Financial Officer Don Clarke said.
The company doesn't expect layoffs in the fourth quarter.
Net2000 shares fell 9 cents yesterday, or 14 percent, to close at 55 cents a share on the Nasdaq Stock Market.

LOAD COMMENTS ()

 

Click to Read More

Click to Hide