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News Releases
New Edge Networks Shifts Strategic Focus, Trims Jobs, DSL Coverage
VANCOUVER, Wash. – (Feb. 22, 2001) – New Edge Networks, the largest competitive broadband service provider in small and midsize markets, today said it is eliminating 55 jobs and scaling back its broadband DSL coverage area as it increases its focus on offering new advanced broadband services.
With its increased focus on data communications and virtual private network, or VPN, services, the company is realigning the functions it now needs to support the faster growing side of its business. The jobs that are affected are across all functional areas and levels of the organization. Almost all of the jobs are based at the company’s headquarters location in Vancouver, Wash.
New Edge Networks also is powering down equipment for high-speed DSL connections at selected sites in Florida and Georgia, leaving the company with coverage in 500 locations in 27 other states. This allows New Edge Networks to reallocate and shift its investments to its VPN services group.
“The actions we are taking today are painful because they involve the displacement of employees who signed on to our vision of bridging the digital divide with DSL,” said Dan Moffat, president, CEO and co-founder of New Edge Networks. “However, the investor environment has changed and we cannot operate in year 2001 with a 1999 plan.”
Starting out as a pure-play broadband DSL provider in June 1999, New Edge Networks has been aggressively expanding its broadband products and services. New Edge Networks currently derives most of its revenue from VPN services that the company provides through its national ATM data communications network.
“What is happening in our industry is not at all a reflection of the demand for broadband, particularly the services we are able to offer through our ATM backbone network,” Moffat said. “Customer demand is booming. The opportunity for broadband service in underserved small and midsize cities has never been better. ”
“At the same time, ironically, the capital crunch we’ve faced in the past year has been more severe than at any other time in more than 10 years,” Moffat said, “We have to balance our desire to grow with the reality of tight capital markets. I think there are willing investors for companies with excellent performance records and potential to succeed as we have demonstrated.”
Affected employees were informed this morning by their managers. The downsizing brings the company wide workforce to 245.
New Edge Networks provided affected employees a generous severance package that includes severance pay, stock option vesting, job-hunting assistance and counseling. The company also permitted affected employees to purchase their PC’s or laptops at significant discounts. Employees are eligible for rehire if their skill sets match positions that may open later as market conditions improve.
About New Edge Networks
New Edge Networks was founded in June 1999 to provide broadband services nationally in small, midsize and semi-rural markets where populations generally range from 5,000 to 250,000. The Company owns and operates a national data communications network with 17 regional aggregation points and almost 500 nodes making it one of the largest ATM networks in the United States. Through this network, New Edge Networks today delivers a full range of consumer and business-class DSL options as well as advanced broadband services such as VPN and frame relay. New Edge Networks plans to overlay voice, video and other value added broadband services and remain technology agnostic. Top-tier private venture firms, global financial institutions and worldwide technology firms provide financial backing to New Edge Networks. The company's Web site is www.newedgenetworks.com.
Contact:
Sal Cinquegrani
(360) 906-9723
ATTN: New Edge Networks news releases contain information that is accurate as of the date they are issued. Information contained in past news releases may become out of date and the company does not assume responsibility for updating information contained in past news releases.