NaviSite Cuts 126 Workers

In another move to cut costs, and possibly make it more attractive to a buyer, NaviSite , has
cut 126 full and part-time employees, approximately 25 percent, of its total staff.

The Andover, Mass., Web and application host said included in the total number are seven of 13 vice presidents, in the areas of sales, human resources,
international, strategic planning, managed services, marketing, and technology planning, as well the general counsel. Executive responsibilities will be spread amongst
remaining employees.

The majority of pink slips, about 90, will come in the Bay State.

“We are continuing to proactively and decisively respond to market conditions by focusing on the elements that are most important to our customers and our
business — operational excellence and managing our cost efficiencies” said Tricia Gilligan, NaviSite’s acting CEO.

Gilligan was tapped to lead the company only two weeks ago after Joel
Rosen
resigned.

She said the moves will significantly reduce the NaviSite cash burn rate and help it become cash-flow positive. Financial details of the latest cuts will be released with
the firm’s quarterly earnings in September (an exact date has not been set).

In March, the company hired investment bank Goldman, Sachs to help it find a buyer. At the time, NaviSite said it had received several inquiries but none have
materialized.

Jay Seaton, a NaviSite spokesman, said the reductions were independent of efforts to sell the company. When asked about Gilligan’s “acting” title, Seaton said it
remains by “mutual choice” of the Gilligan and the board and that there is not currently a search for another chief.

NaviSite is majority owned by Internet investor and operator CMGI , also of Andover.
Microsoft , the Redmond, Wash., software giant, also holds a minority stake.

NAVI shares were unchanged Tuesday, closing at 0.75, well off a 52-week high of 3.75.

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