EarthLink Restructuring Costs 1,300 Jobs

Tuesday Jan 28th 2003 by Ryan Naraine
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The third-largest ISP shuts down call center facilities in four U.S. cities in a move that will save about $20 million annually.

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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