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Excite@Home Australia cuts staff in half

Layoffs hit 46 out of about 100 workers as the parent company's board meets and considers filing for bankruptcy protection as early as Friday, according to sources.

SYDNEY, Australia--Excite@Home Australia laid off 46 workers out of a total of about 100 Friday, with all but a few of the rest to be out of jobs within weeks, according to a source close to the situation.

see Special report: Excite@Home marriage doomed at the altar? As reported earlier this week, sources close to Redwood City, Calif.-based Excite@Home said the company would file for Chapter 11 bankruptcy protection late this week or early next week unless it receives an unexpected cash infusion.

The company's board is meeting Friday to discuss options, including a bankruptcy filing or asset sale to AT&T.

Excite@Home, the largest high-speed Internet service provider in the United States with about 4 million customers, does not have enough cash to cover its operating costs and has an estimated $800 million or more in debt.

In Australia, the remaining workers at Excite@Home will help telecom provider Optus, which took full control of their Excite venture last week, with the integration of their networks. The full integration of the two networks will take place at lightning speed, with Oct. 22 set as the deadline, according to the source.

"That would be amazing speed if it could be done, to say the least," the source said.

The integration of two major networks of this kind would usually take "a very, very high-level plan done over many months," the source added. "Four to six weeks is not usual practice."

The Optus@Home network boasted a 90 percent customer satisfaction rate, according to a recent ACNielson report. "No other ISP has ever achieved that," the source commented. "It?s highly unlikely service levels and service uptime will be anywhere near that during this (integration) period."

The source said no one at Excite@Home had been offered jobs at Optus.

Excite@Home confirmed that layoffs commenced Friday but declined to go into detail.

Optus did not return calls by press time.

Excite@Home Australia was formed in June 1999 through a joint venture of broadband service provider @Home and the Australian integrated communications company Cable & Wireless Optus.

Staff writer Rachel Lebihan reported from Sydney.