Web firm Digital Island slashes 90 jobs, loses executive
SAN FRANCISCO Digital Island Inc. will fire 90 people, or about 10 percent of its 927 workers by the end of June to cut costs.
The provider of Internet and networking services also announced that its chief financial officer had resigned.
Since January, Digital Island had already fired 113 workers, or 11 percent of its workforce, spokesman David Radoff said.
The company said it is cutting costs because it didn't get the expected orders from some new customers and traffic slowed on Internet Web sites it manages. The company said Chief Financial Officer Tom Thompson quit to pursue personal interests.
Digital Island was founded in Honolulu, but moved its headquarters to San Francisco in 1999. It maintains a private computer network for corporate clients that need to deliver multimedia information online at high speeds. Among its clients are J.P. Morgan Chase & Co., Compaq Computer Corp. and News Corp.'s British Sky Broadcasting network.
Also yesterday, the company said cost-cutting efforts included expanding a data-storage center in Staten Island, N.Y., delaying building a new one in Brooklyn, N.Y., and combining three offices in Los Angeles.
Officials with the company's Honolulu office said yesterday that it was still unclear whether any of the announced job cuts would affect local operations.
Digital Island, which has begun a search for a new financial chief, said Treasurer Addo Barrows will assume Thompson's duties and the title of interim chief financial officer.
Digital Island said its second-quarter loss, including a $1.04 billion charge for acquisitions, widened to $1.19 billion, or $15.11 a share, from $92.7 million, or $1.49 a share, a year earlier.
The company's revenue rose to $32.8 million from $11.3 million a year earlier. The company expects to have 2001 revenue of $140 million to $145 million.
The state Strategic Development Corp., which paid $450,000 for 315,000 shares of the company in 1997, has been able to reap some of the gains in the company's stock price before it sank.
Among its sales, the state received $2 million from the sale of 24,400 shares in January 2000 for about $100 a share.