EarthLink Restructuring Costs 1,300 Jobs

Atlanta-based access provider EarthLink on
Tuesday announced it would shut down call center operations in four U.S.
cities and lay off about 1,300 employees as part of a cost-cutting move.

With its dial-up subscriber base dwindling, the nation’s third largest
ISP said it would close its entire call center operations in Dallas, Texas;
Sacramento, Calif.; and Seattle, Wash. Additionally, a tech support and
customer service center in Pasadena, Calif. would also be shuttered in the
latest belt-tightening move.

The layoff will account for approximately 20 percent of EarthLink’s
workforce and will take place over a 30-day period, beginning February 21,
the company said.

EarthLink, which has about 4.6 million consumer and small business
customers, plans to route customer inquiries normally handles by the
affected facilities through its remaining call centers in Atlanta,
Pennsylvania and Roseville, Calif.

The company will absorb exit costs in the range of $41 million in the
first quarter this year, including $11 million for certain employee-related
costs, $20 million for lease termination costs, and non-cash asset
write-offs of approximately $10 million.

“We estimate the streamlining of our call centers will reduce annualized
operating expenses by more than $20 million,” the company said in a brief
statement.

The latest cuts come at a crucial time for the ISP, which has struggled
to keep pace with heavyweights AOL and Microsoft’s MSN services. EarthLink hawks additional services like domain
registration, e-commerce and Web hosting and Volaris,
MindSpring and OneMain.com.

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