Clearwire to lay off 15 per cent to save cash

The WiMax carrier will also hold off on retail and marketing efforts in some cities where its network goes live

WiMax service provider Clearwire will lay off 15 per cent of its employees and suspend the opening of retail stores and marketing campaigns in some cities as it tries to conserve cash and raise additional capital.

The company logged a net gain of 1.23 million subscribers in the third quarter, reaching 2.84 million total subscribers, and still expects its network to cover 120 million potential users across the U.S. by the end of this year, it said on Thursday. Revenue rose 114 per cent from a year earlier to $US147 million. But Clearwire reported a loss for the quarter of $139 million, or $0.58 per share.

Clearwire is also talking with its major shareholders and third parties about options for raising additional capital to continue expansion of its WiMax network beyond its current build plan. Those could include debt or equity financing, asset sales or "strategic transactions," the company said in a press release on its results. According to published reports, Clearwire has been exploring the sale of some of its vast radio spectrum holdings.

However, the company also announced dramatic steps to conserve its resources in the near term. In cities including Denver and Miami, it will turn on its network before the end of the year but not open retail stores nor advertise its Clear-branded mobile service. Wholesale partners that resell access to the Clearwire network, such as Comcast and majority owner Sprint Nextel, could market the network in those cities themselves if they chose to do so, said Clearwire spokesman Mike DiGioia.

In addition to the 15 per cent cut in employees, Clearwire will substantially reduce its contractor workforce. It will also suspend zoning and permitting activities in some markets that it is pursuing beyond its current build plan until additional funding becomes available.

Clearwire also said it would delay the release of its first Clear-branded smartphone.

The company believes these steps could save between $100 million and $200 million this year and again in the first half of 2011.

Clearwire is up against looming competition from Verizon Wireless, which plans to launch an LTE (Long-Term Evolution) network by the end of this year that it says will reach 110 million U.S. residents. AT&T also is planning an LTE launch next year, and T-Mobile USA is rolling out its own high-speed mobile network using HSPA+ (High-Speed Packet Access) technology.

Clearwire's shares on the Nasdaq stock exchange were down $0.30 to $6.87 in after-hours trading Thursday afternoon, following the announcements.

Tags business issuestelecommunicationlayoffsNetworkingwirelessfinancial resultscareersClearwiremobileWiMax

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Stephen Lawson

IDG News Service

Comments

Comments are now closed.

Latest News Articles

Most Popular Articles

Follow Us

GGG Evaluation Team

Kathy Cassidy

STYLISTIC Q702

First impression on unpacking the Q702 test unit was the solid feel and clean, minimalist styling.

Anthony Grifoni

STYLISTIC Q572

For work use, Microsoft Word and Excel programs pre-installed on the device are adequate for preparing short documents.

Steph Mundell

LIFEBOOK UH574

The Fujitsu LifeBook UH574 allowed for great mobility without being obnoxiously heavy or clunky. Its twelve hours of battery life did not disappoint.

Andrew Mitsi

STYLISTIC Q702

The screen was particularly good. It is bright and visible from most angles, however heat is an issue, particularly around the Windows button on the front, and on the back where the battery housing is located.

Simon Harriott

STYLISTIC Q702

My first impression after unboxing the Q702 is that it is a nice looking unit. Styling is somewhat minimalist but very effective. The tablet part, once detached, has a nice weight, and no buttons or switches are located in awkward or intrusive positions.

Resources

Best Deals on GoodGearGuide

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?