OmniSky falls closer to Earth
The wireless services company lays off nearly 100 employees, mostly from closing several European offices, as the company consolidates its business.
Representatives at the San Francisco-based wireless services company did not return repeated phone calls. But the company reported that it had 198 full-time workers at the end of 2000, according to a filing with the Securities and Exchange Commission.
"The actions we've taken significantly reduce our cash burn while we continue ongoing discussions with vendors and partners to raise the capital necessary to take us to profitability," OmniSky Chief Financial Officer Lawrence Winkler said in a statement.
Despite the layoffs, OmniSky recently received a vote of confidence from News Corp. when the media giant increased its stake in the company from 10 percent to nearly 20 percent in late May.
The wireless services category is a challenging one as companies try to strike a balance between lowering subscription rates and offering enough content to attract new customers, analysts have said.
OmniSky also reported Thursday that it expects second-quarter revenue to come in at $4.6 million to $4.7 million, which is in line with prior guidance. OmniSky expects a loss for the second quarter in the range of $27 million to $29 million, an improvement to prior estimates for a loss of $41 million to $43 million. Second-quarter results will be reported Aug. 7.
Revenue from subscriptions is expected to make up the bulk of the overall revenue, coming in at between $3.8 million and $3.9 million. Subscription revenue is based on the 42,000 subscribers that OmniSky had at the end of the second quarter.