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Genuity Braces For Slowdown

Internet infrastructure giant Genuity met first-quarter financial targets but will lay off about 620 workers, 12 percent of its staff, because customers are delaying orders.

Contract worker cuts will bring the total number of job reductions at the Woburn, Mass. company, to 800. Genuity did not say which offices or departments would be hit hardest.

"We will manage our business assuming slower economic growth until we see a sustained market turnaround," said Paul R. Gudonis, Genuity's chairman and CEO in a statement. "These steps solidify our long-term financial strength, and position us to effectively capture future growth opportunities."

For the first three months of 2001, the company reported a net loss of $292.4 million, or $1.52 per share, in the first quarter. That compares with a net loss of $209.8 million, or $11.49 per share for the year-ago period

On a pro-forma basis, Genuity lost 30 cents per share this quarter. Analysts polled by Thomson Financial/First Call survey expected a loss of 33 cents a share. Genuity also warned that sales this year will be from $1.3 billion to $1.35 billion, below previous forecasts.

The company operates the second-largest dial-up Internet network in the United States. It was formerly the Internet division of GTE Corp. and spun out as part of GTE's merger with Bell Atlantic, now Verizon Communications.

At midday, shares of GENU slumped 0.07, or 3 percent, to 2.31. In the last year, the issue has ranged between 2.38 and 11.25.