Exodus cuts 15 percent of staff

by Jennifer Mears

May 10, 2001 —

Exodus Wednesday said it will eliminate about 675 jobs, or 15% of its 4,500 employees worldwide, as part of cost-cutting measures aimed at helping the Web hosting firm weather the tough economic climate.

The announcement follows Exodus' earnings news in April, in which the company reported a $118 million cash net loss for the quarter and said it would cut capital expenditures for the year by $300 million. At that time, CEO Ellen Hancock said contract and temporary workers had been let go, and that staff would be reduced through attrition and the elimination of redundancies resulting from Exodus' acquisition of Global Center.

Hancock also noted the company is fully funded with $1.1 billion cash on hand.

"We have been analyzing all aspects of our operations," Dick Stoltz, Exodus CFO, said in a statement. "We believe we can achieve our financial plan by reorganizing and strengthening our operations. These staff reductions are consistent with that goal. As a result, we expect to record a non-recurring charge of less than $10 million for the current quarter."

He says the cuts will not affect customer service.

"We continue to expand our footprint of operations. We opened Internet data centers in Dallas and Amsterdam last month, and next week, we will open an Internet data center in Paris," he said. "Our goal with these efforts is to ensure we have the right people in the right places. We believe these actions will strengthen our competitive position in the marketplace."

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