360networks cuts 800 jobs

360networks announced that it is laying off about 44% of its workforce in an effort to reduce operating expenses and conserve capital.

The move will cut the company’s headcount from 1800 to about 1000. Positions are being eliminated across many divisions, with the U.S. feeling the brunt of the layoffs.

“About ½ of the positions are in the U.S.--primarily Denver--but there are also some positions impacted in Seattle and in our Herndon, Va., office,” said a company spokeswoman.

The remaining staff cuts are in Asia, Canada, Europe and South America. No further cutbacks are planned at this time, the spokeswoman said.

The announced layoffs come as no surprise. On June 15, 360networks did not make a scheduled $10.9 million interest payment on its 12.5% senior notes and will be in default if payment is not made by the middle of next month.

In addition, the 360networks is struggling with a $300 million funding gap and talks with possible financers have proved fruitless to this point. According to a press release, the company is now considering “other alternatives, including restructuring.”