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Digital Broadband lays off 85 percent of work force

The high-speed Internet and local phone provider announces that it will lay off 450 of 526 employees, or 85 percent of its work force, as part of a corporate reorganization.

    Digital Broadband Communications, a high-speed Internet and local phone provider, announced Thursday that it will lay off 450 of 526 employees, or 85 percent of its work force, as part of a corporate reorganization.

    Like many broadband providers, the company was forced to cut its staff drastically because of a cash shortage, and it continues to explore its options for finding new investors or possibly a buyer, executives said.

    "We were meeting or exceeding our numbers across most categories, but it all came down to the market conditions," Digital Broadband Communications chief executive Valeri Marks said. "The timing just wasn't right now for many people to invest. We had to make a difficult choice to let people go."

    Digital Broadband Communications, a privately held carrier serving seven northeastern states, offers high-speed Net access via digital subscriber lines (DSL) and local voice service to about 1,000 business customers.

    The company--not to be confused with the former free DSL provider Broadband Digital Group, which is now known as Winfire--intends to continue serving its existing customer base, executives said, but will do so with a limited work force.

    Callers to the company's headquarters were greeted with this recorded message: "We are undergoing a restructuring of our organization. As a result, we will only be processing repair and service calls today."

    Digital Broadband Communications is just the latest in a long line of smaller competitors to face serious financial perils this year. A stock market downturn and resulting shortage of investment capital forced many broadband providers to abandon their grow-at-all-costs strategies.

    Huge customer demand for high-speed Net access encouraged many of these providers to borrow and spend heavily in an effort to rapidly gain market share. But balky investors quickly put an end to those plans, forcing companies such as Covad Communications, NorthPoint Communications, PSINet,, HarvardNet, Flashcom and others to lay off workers, restate earnings, and consider takeover offers and a number of other undesirable outcomes.

    "Unfortunately the capital markets are very challenging right now," Marks said.