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Interliant Lays Off 14%, Reduces Earnings Outlook

ASP Interliant Inc. this week announced it will immediately eliminate approximately 190 positions, or 14 percent of its workforce, to accommodate a narrowing of its business focus to key areas. The company also said it expects first quarter revenues to be $37 million, down from $48 million last quarter and below its previous guidance of $44 to $46 million.

"During the first quarter of 2001, the economy slowed to a far greater extent and more rapidly than we had anticipated at the time we reported fourth quarter 2000 results," said Herb Hribar, Interliant president and CEO. "In addition, the rate of adoption for the ASP model is lower than we expected. Given these factors, and after carefully reevaluating our business plan for the year, we concluded that it is critical for us to direct our energies and resources to those offerings that give us the greatest opportunity for growth and return on investment."

Interliant's new business focus will include the areas in which it expects to realize sales momentum and demand for services. These areas are: Managed Messaging (on both the Lotus Domino and Microsoft Exchange platforms), Managed Hosting, OEM (private label) Web hosting, Managed Security services, and Professional Services.

"We believe we have a competitive presence and an opportunity to claim a leadership position in each of these areas," Hribar said. "These also are our highest-demand offerings, and prior investments in infrastructure and personnel should enable us to take them to the next level. We anticipate that our concentrated focus also will enable us to direct additional resources to these areas and, therefore, to deliver considerable benefit to our existing customers. We remain fully committed to the services we provide our customers."

The company said it will not make further investments in hosting for ERP (enterprise resource planning), including HR and Financial solutions; CRM (customer relationship management); and e-commerce hosting. The company also is exploring the disposition of certain assets and business units outside its narrowed solution focus, but will continue to service existing customers in these areas until that takes place.



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