Digex Slices 20% of Workforce

Digex, Inc. , is eliminating approximately 200 positions, or about 20 percent, of its workforce. The initiative will begin immediately and is concentrated in non-service delivery organizations. These efforts are part of an overall plan for the Laurel, Md.-based Digex to become “financially self-sustaining, and to align and focus resources on servicing the company’s customer base.”

The Web site hosting company, which is majority-owned by bankrupt telecom carrier WorldCom, expects to complete the job cuts by the end of the week. Affected employees will receive a severance package relative to their duration of service with the company.

Digex also provides consulting and enterprise services. The company’s clients include Bank of America, Comcast Cable, The Rockefeller Foundation, Ford Motor Company, and Publishers Clearing House. Among the company’s technology partners are Akamai, Cisco Systems, Microsoft, and Sun Microsystems.

The company operates two data centers in the U.S. and one in the U.K. that house more than 4,200 company-owned and managed servers. The company offers network connectivity through WorldCom, which controls about 94 percent of the voting stake in Digex.

“Digex has three top priorities: customer focus, expanding our value proposition and financial independence. This initiative is one of several actions we’re taking to ensure expenses are aligned with revenues,” said George Kerns, president and CEO of Digex. “These are difficult decisions and much effort has been made to ensure that these actions will not impact delivery of services to our customers. Digex remains committed to retaining its market leadership and providing the highest quality hosting solutions and services.”