DSL.net cuts 90 staffers, closes 250 central offices

In an attempt to slow its cash burn, high-speed Internet provider DSL.net said today it would cut 90 employees from its work force and close 250 operational central offices.

The troubles experienced by CLECs competing with RBOCs in the DSL space have been widely publicized. Although DSL.net focuses on the small and medium-sized businesses where opportunities to compete with RBOCs in the DSL segment are stronger, the larger independent DSL providers’ problems in recent months has crippled confidence in smaller CLECs, said Adam Guglielmo, a DSL analyst at TeleChoice.

“Their financial situation looks really bleak,” he said. “DSL.net is hanging on, but with NorthPoint, Rhythms and a lot of the smaller players going out ... it makes small-medium businesses a little bit more worried about dealing with DSL.”

DSL.net said excluding a restructuring charge of $25 million to $30 million booked against the second quarter 2001, it would meet or exceed guidance outlined in May. Analysts polled by Thomson/Financial First Call estimate a 39-cent loss.

While revenues for 2001 are expected to be between $45 million to $50 million, the company also anticipates an EBITDA loss of $80 million to $90 million.