Netpliance: At Half Staff

Just when some people might think dot-com layoffs are slowing down another one goes under.

Netpliance Inc. cut its staff by 54 percent Friday. That’s exactly 76 employees. Netpliance expects to reduce operating expenses
by approximately $6 million and will retain 50 employees.

The leaders are leaving, too, apparently. Co-founder Kenneth A. Kalinoski
left the firm recently and co-founder Kent A. Savage will bail out March 15
to pursue other opportunities.

Netpliance has been in the doldrums for the past several months and hasn’t
had a deal since its agreement with the No. 2 ISP Earthlink in November. The
timing of that play coincided with Netpliance’s trimming of 38 percent of its then staff (93 workers), following its
announcement that it lost nearly $42 million, or 69 cents per share.

The firm sullied its reputation with its i-opener appliance a year ago when
people noted that the device was nothing more than a PC without a hard
drive — it could send and receive e-mail as well as browse the Web. The
i-opener is now finished as of this week.

While many technology firms are trying their hands at such products, namely
Compaq and Gateway, i-opener hit a wall after Netpliance failed to
effectively establish its brand.

The company refused to quit, saying that it would split into two key groups:
one would develop products and applications that improve the delivery of
broadband technology while the other would provide managed services to ISPs.

How bad are things for Netpliance? Put it this way — last week an
investment firm scrapped plans to buy the firm. The anonymous firm
considered buying the works last December but changed its mind. Before that,
Netpliance was slapped with a notice from NASDAQ, which said it was going to
de-list the firm for failing to maintain a $1 bid price.

Netpliance currently trades at 34 cents per share.

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