MIDDLETOWN – WiMax service provider Towerstream Corp. last week cut its work force by 21 percent, according to a regulatory filing.
Towerstream said it laid off a total of 35 employees on June 10, all but two of whom were members of its sales and marketing team. The company said it would spend roughly $100,000 on severance, accrued vacation and other costs related to the layoffs.
Seifert Systems Invests in Energy Efficiency to Strengthen Operations
For manufacturers, energy is more than just another operating expense. It plays a critical role…
Learn More
The Middletown-based company previously disclosed that it had laid off 18 sales and marketing workers since March 2008, reducing its sales force by 51 since early last year.
Towerstream said it estimates annual savings from the latest reductions will total between $1.2 million and $1.6 million.
Towerstream was founded in 2001, but has struggled to turn a profit even as it has managed to increase its revenue and expanded into new markets. In May, the company posted a first-quarter net loss of $2.42 million, or 7 cents a share, on revenue that grew 64 percent to $3.42 million.
Towerstream executives have turned their focus to cutting costs over the past year in an effort to turn the situation around. The company’s chief operations officer, Bruce Grinnell, left the company on May 1 and is not being replaced.
Towerstream Corp. (Nasdaq: TWER) is a provider of WiMax high-speed wireless broadband service to businesses in the Boston, Chicago, Dallas-Fort Worth, Los Angeles, Miami, New York, San Francisco, Seattle, and Providence-Newport markets. Additional information is available at Towerstream.com.
Towerstream’s concept has been great right along. It’s model: not so. I mean, the ad on this page for Cox Communications offers business internet access for under $80/mo. How do you compete when your lowest priced package, from what I recall, is around $500, and offers much more bandwidth than the majority of prospects need?
In their shoes, I’d focus on an offering priced around $200.mo that includes multiple mobile wireless access for laptops and minis as more workers require mobile platforms to accommodate working from multiple locations.
If traditional wireless companies successfully deploy 4G or 4G-like services in the market, I’m afraid the company will find it extremely difficult, if not impossible to compete….the 2 M’s really come into play here: mobility & microbiz, and Verizon Wireless, AT&T and Sprint seem to get it, judging from their ads. Stay tuned..
Jim Van
Logicomm, Inc.
http://www.logicomm-inc.com