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Service provider cuts staff, explores options

Former employees of Xuma.com say the company made deep staffing cuts, while financial backers say they are exploring alternatives for its future.

    Former employees of Xuma.com say the service provider and application hosting company has made deep staffing cuts, while financial backers say they are exploring alternatives for the company's future.

    Broadview Capital Partners, one of Xuma's investors, said in a statement Monday that "the challenges of an extremely difficult fund-raising environment have prevented Xuma from securing sufficient funding to date. Broadview Capital Partners is working with Xuma to consider all appropriate strategic alternatives."

    Mike Davis, a former regional sales representative for Xuma, said he was laid off as part of a wave of cuts earlier this month.

    "I haven't been privy to anything except that they were shutting down the offices and doing what they called 'massive layoffs,'" Davis said. The company "told us all at once. They shut down e-mail and everything--all in one fell swoop."

    Co-founder and Chairman Jamie Lerner confirmed the layoffs but said Xuma was not shutting down. He said an unidentified company planned a joint announcement Tuesday involving Xuma's future, but he declined to give any details on what he called a "transaction."

    "Along with other investors, we're actively pursuing strategies to figure out the best way to maximize shareholder value there," said spokesman Mike Horgan of CIT's Equity Investments & Venture Capital, another financial backer.

    One former employee, who asked that he not be identified, said all but a handful of top executives were laid off earlier this month. Earlier this year, Xuma slashed almost half its work force of about 300 employees.

    San Francisco-based Xuma has offices in New York, Las Vegas and Los Angeles. As part of the managed service provider market, it competes against companies such as Loudcloud.

    Xuma runs a server farm in San Francisco, providing application and network management and maintenance services to businesses, technology systems integrators and hosting providers.

    NextMonet.inc Chief Executive Abby Aldermanof said she got a message Monday from Xuma, which runs her company's Web site.

    "They called to tell us they are not going out of business," Alderman said, adding that she didn't get a chance to speak to anyone from Xuma. She said the message was that "in light of the rumors, we are not going out of business. We are looking at a strategic partnership that we want to talk to you about."