January 22, 2001, 7:11 PM — NorthPoint Communications last Tuesday filed for Chapter 11 bankruptcy protection, less than two months after Verizon terminated its merger agreement with the San Francisco DSL wholesaler. The same day, DSL wholesaler Rhythms NetConnections of Englewood, Colo., announced plans to focus on fewer markets and lay off 450 employees, about one-quarter of its workforce.
NorthPoint CEO Elizabeth Fetter says her company will continue to provide DSL service to its customers. She says the Chapter 11 filing will give NorthPoint time and financial resources to allow it to continue operating until it finds a strategic partner.
Meanwhile, Rhythms became the last of the three large national DSL wholesalers to announce cutbacks; Covad and NorthPoint made major workforce cuts late last year.
Rhythms plans to concentrate its efforts on its 40 largest markets, which encompass about 40% of the homes and 45% of the businesses in the U.S. By refocusing its efforts and scaling back its workforce, Rhythms expects to cut its 2001 expenses by about $80 million.