Covad to Slash 400 More Jobs
High-speed Internet access provider Covad Communications Group Inc. accelerated its job-cutting Friday, outlining plans to fire 400 more employees as part of a drive to become profitable.
On top of 400 job cuts disclosed last month, Covad will end up paring 26% of its work force of 3,100.
Santa Clara, Calif.-based Covad also said it will close about 200 offices that provide digital subscriber lines, or DSL, which give users high-speed Internet connections over telephone wires.
The closures, which will be scattered around the country, affect about 4,000, or 1.5%, of Covad’s 270,000 subscribers.
Covad is trying to reverse steady losses by slashing $200 million from its 2001 expenses. The cost-cutting goal could reduce overhead as much as 30%.
Although Covad operates in a promising market that analysts expect to grow as more households and small businesses buy high-speed Internet access lines, the company has been a financial flop so far.
After losing $195 million last year, Covad lost an additional $433.5 million during the first nine months of this year. The company already has braced the stock market for another substantial loss in the fourth quarter.
Impatient investors savaged the stock this year. Covad’s shares closed up 25 cents at $1.66 on Friday, well off its 52-week high of $66.63 reached in March.
The dismal performance resulted in the ouster of Chief Executive Robert E. Knowling Jr. in November. Frank Marshall, a former Cisco Systems Inc. executive, is serving as interim CEO during the early stages of the turnaround effort.
