New Edge Lays Off 18%
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Aligning themselves to focus on data communications and VPN services, New Edge Networks, a broadband service provider to small and midsize markets, today said it is eliminating 55 jobs and scaling back its broadband DSL coverage area.
The jobs that are affected, which amount to approximately 18% of the company's workforce, are across all functional areas and levels of the organization. Almost all of the jobs are based at the company's headquarters location in Vancouver, Wash.
"The actions we are taking today are painful because they involve the displacement of employees who signed on to our vision of bridging the digital divide with DSL," said Dan Moffat, president, CEO and co-founder of New Edge Networks. "However, the investor environment has changed and we cannot operate in year 2001 with a 1999 plan."
New Edge Networks also is powering down equipment for high-speed DSL connections at selected sites in Florida and Georgia, leaving the company with coverage in 500 locations in 27 other states.
According to the CEO, the slowdown in the industry is not a reflection of lightened demand for broadband connectivity, but rather the result of lagging capital availability.
"The capital crunch we've faced in the past year has been more severe than at any other time in more than 10 years," Moffat said, "We have to balance our desire to grow with the reality of tight capital markets."
New Edge Networks provided affected employees a severance package that includes severance pay, stock option vesting, job-hunting assistance and counseling. The company also permitted affected employees to purchase their PCs or laptops at significant discounts.