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Earthlink cans 1,300 call centre staff

Difficult and emotional time

MemoWatch Yesterday Atlanta based ISP Earthlink announced plans to cut its staff headcount by 1,300 in a move to reduce its operating costs by $20 million.

Hardest hit by this cost saving exercise will be the ISP's call centre staff, who received a memo from company CEO Garry Betty explaining the rationale for their imminent redundancy.

Although written in the usual corporate speak, Betty's memo is commendably free of the flowery prose and hubris corporate CEOs sometimes fall prey to on such painful occasions.

From: Garry Betty
Sent: Tuesday, January 28, 2003 1:25 PM
Subject: All Staff: Summary of Major Organizational Changes

Today we have reached a very difficult decision that affects all of us. The decision was not made easily and was reached only after a lengthy and careful evaluation of the alternatives.

As demonstrated by our relatively brief history, we are regularly faced with new business challenges in an increasingly competitive environment. To be successful, we must continually evaluate our business alternatives and be willing to make the decisions necessary to ensure the long-term growth and profitability of EarthLink.

Toward that end, we will be outsourcing all Dial-Up support (Customer Service, Technical Support, and e-Support) and closing the following locations: Seattle, Sacramento, Dallas, and the New York Drive building in Pasadena (excluding sales).

There are several reasons for this decision. We are consolidating operations to eliminate excess office space where we have almost double the amount we need. Additionally, in our industry we need to achieve a competitive cost structure for our mature Dial-Up business while still meeting the needs of our customers.

I know this is going to be a difficult and emotional time for each person and their family.
For those of you who will be leaving the company, your contributions, customer focus, and dedicated efforts have helped EarthLink achieve the success it has had. We will make every effort to help you through this transition period.

For those of you whose jobs are not directly impacted, we will continue to need the same exceptional commitment to our customers, and to each other, as we move forward to the next stage of our company's evolution.

Thank you for your cooperation.

Garry Betty
CEO EarthLink

We print this memo not to rub salt into Earthlink's wounds but as a reminder of the human impact of the contraction of the US service provider market.

It's tough out there and we hope Earthlink's customers don't suffer as a result of its though (though judging by its results today) necessary cost-cutting program. Even though it added 98,000 customers over the quarter to close the year with 779,000 broadband subscribers (and five million customers), Earthlink still recorded Q4 losses of $32.9 million on increased revenues of $347.9 million. ®

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