Clearwire's cash crunch prompts layoffs
Subscriber numbers are surging for the 4G provider, but those gains come at a hefty cost that will require Clearwire to cut 15 percent of its workforce.
Clearwire is adding subscribers at a rapid clip as its 4G network hits more major cities, but the company's balance sheet has taken a big hit. Now Clearwire needs funding pronto.
First the good news, the company said it added 1.23 million new subscribers in the third quarter to end with 2.84 million. Those gains have the company projecting more than 4 million subscribers by the end of the year.
But those gains come at a hefty cost that will require Clearwire to cut 15 percent of its workforce, trim marketing spending and delay plans for more stores and city launches (statement). Clearwire said its cash conservation efforts will save about $100 million to $200 million in 2010 and again in the first half of 2011.
Simply put, the company is still losing truckloads of dough. The company reported a net loss of $139.4 million, or 58 cents a share. Revenue for the third quarter was $147 million, up 114 percent from a year ago. Wall Street was expecting a loss of 61 cents a share on revenue of $157.9 million.
Read more of "Clearwire: Subscribers surge, but so does cash crunch; Here come layoffs" at ZDNet's Between the Lines.