Posted at 11:25 a.m., Monday, December 10, 2001
Honolulu Internet data company slashes 22 jobs
By John Duchemin
Advertiser Staff Writer
Data center company Pihana Pacific laid off 22 employees last week, including 10 at its headquarters in Honolulu, a move the company attributed to the slow economy.
Pihana, which had built a network of seven Internet data centers around the Pacific Rim, has had trouble landing customers, company spokeswoman Linda Brock said. She blamed the problems on the post-Sept. 11 recession and the high-tech slowdown, which since early this year has confounded expectations for many high-tech service providers.
"The market is not as robust as we thought it would be," Brock said. "It's not a question of us losing business, it's just that large companies are not making decisions right now. The sales cycle is taking a long time."
The layoffs are a setback for a company that brought in $240 million in cash from venture investors late last year. Pihana spent more than $125 million to build data centers in Los Angeles, Sydney, Seoul, Tokyo, Hong Kong and Singapore to go with an earlier facility in Honolulu. The company still has enough cash to get by, Brock said.
"There's a lot of uncertainty out there — all we can do is keep the company healthy and watch expenses," she said.
The layoffs represent about 10 percent of Pihana employees. The company now has about 180 workers.
Pihana is among many data center companies who have been forced to lay off employees — or worse — this year. The industry grew through 2000 as companies like Exodus, Colo.com and iAsiaWorks envisioned a massive demand for huge high-security buildings where clients would park their computer systems and store data.
Investors poured in billions, but the forecasts proved too optimistic and the industry imploded, with many companies — including Exodus and Colo.com — going bankrupt.
Pihana opened its first data center near the airport in Honolulu in early 2000, but the 10,000-square-foot facility has attracted few customers.
