Internet service provider EarthLink Inc. announced Tuesday a plan to cut 900 jobs, or about half its work force, and close four U.S. offices as part of a restructuring plan aimed at reducing operating costs.
The restructuring will begin immediately and be completed by the end of the year, said Rolla P. Huff, the Atlanta-based company's president and chief executive. More cuts could be announced before the year's end, he said.
"While we see this as an important first step in unlocking the underlying value that we believe is in our company, we are only eight weeks into the process of repositioning EarthLink for the future," he said. "These changes get our cost structure in line, but there is much more to do."
The company will close offices in Orlando, Florida, Knoxville, Tennessee, Harrisburg, Pennsylvania. and San Francisco. Earthlink also said it will "substantially reduce its presence" in Atlanta and Pasadena, California.
EarthLink said it expects to save between $25 million (euro18.3 million) and $35 million (euro25.6 million) through the rest of the year due to the restructuring. The company currently employs about 1,900 people.
Huff, who was appointed in June, has said he believes the company must implement a more focused business strategy and adjust its cost structure to fit its current business.
The company faces questions over the future of its municipal wireless Internet projects and its costly Helio cell phone joint venture with SK Telecom of South Korea.
Earthlink in July cut its fiscal year 2007 revenue estimate after reporting hefty losses related to the Helio joint venture project.