Metricom to cut staff by 23%

Mobile data network operator Metricom announced a second wave of staff cuts Tuesday, as it plans to lay off 23 percent of its current employees. The cuts, combined with the 179 employees let go in March, reduces the company to nearly half the size it was at the beginning of the year.

“The continued focus on marketing and operating in our existing markets, coupled with a strategic shift away from rapid widespread deployment, has significantly changed our staffing needs,” said interim CEO Ralph Derrickson in a statement. “Further, our critical need to conserve cash to continue our operations beyond August has led to the reduction of our workforce.”

After the layoffs, Metricom will have 451 employees, down from the 800 it had in March. The company—which operates the Ricochet microcellular data network—has stopped new network expansion and drastically cut costs in an effort to avoid running out of cash in August. In April it reported a net loss of $186 million for the first quarter, almost six time the loss it posted for the same quarter last year.

The job cuts reflect Metricom’s needs to slash costs and focus on gaining revenues in existing markets, but do not change the operator’s financial outlook, a Metricom spokeswoman said.

“We haven’t changed our public statement with regards to August,” she said. “We’re not releasing any numbers yet.”

Ricochet’s networks have traditionally offered data speeds of 28 Kb/s, but over the last year Metricom has been upgrading them to accommodate speeds of 128 Kb/s. Before financial pressures caused Metricom to cease expansion, the company had upgraded 13 of Ricochet’s 15 markets to the service. As of the end of the first quarter, Ricochet had 40,900 subscribers.