NextWave cuts staff to save cash
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By Elizabeth Douglass
STAFF WRITER
May 28, 1997
NextWave Telecom of San Diego, widely known as an ambitious and fast-growing wireless upstart, is laying off workers and cutting back operations to conserve cash.
"It's a significant reduction in our full-time work force," said Jennifer Walsh, NextWave spokeswoman. "All markets and all regions are affected, and it's pretty broad-based, from engineering to marketing to administration."
The move may come as a shock to wireless watchers, who have come to see NextWave as another fast-rising phone company. NextWave grew from just 20 employees two years ago to about 400 before the cut backs.
NextWave would not say how many employees were fired nationwide, but Walsh said the company laid off 45 employees in California, with the cuts hitting its San Diego and Anaheim offices almost equally.
In San Diego, NextWave's full-time work force totaled about 60 employees, so the cuts amount to more than a third of the local staff.
Some employees were notified late last week, while others, including the San Diegans, heard the news yesterday, Walsh said. The job cuts are effective immediately, but employees are being offered severance packages, the company said.
"We feel pretty awful," Walsh said. "We're extremely disappointed to have to lay people off at this stage .ÿ.ÿ. you hate to lose the work force you worked so hard to assemble."
NextWave, which holds wireless licenses covering 88 U.S. markets and has another seven licenses pending, is building a nationwide network to carry a type of wireless service called personal communications services, or PCS.
The company will not sell PCS service to the public, but will wholesale space on its network to other providers, such as MCI, which would then sell PCS wireless service under their name.
NextWave raised more than $600 million from private investors, more than many of its upstart peers, by tapping investors such as San Diego-based Qualcomm and a cadre of Asian firms.
With so many licenses to pay for and so many markets to penetrate, NextWave's expenses are considerable, too.
The company has been on a steady search for additional capital. A recent ruling by the Federal Communications Commission eased restrictions on NextWave's overseas fund-raising, but that process could take time.
In the meantime, NextWave is retrenching.
The company said it will slow work in many Southeastern and Midwestern markets so it can focus more money on the big cities NextWave customers are most anxious to serve.
Work will be cut back in Ohio cities such as Cleveland and Cincinnati and Florida cities such as Jacksonville and Tampa, Walsh said. NextWave will continue work to launch its network in major markets, including San Diego and Los Angeles, Atlanta, Boston, Houston, New York, Washington, D.C., and others.
Within the wireless world, NextWave's work-force reduction comes amid increasing speculation about whether NextWave and many other wireless companies will survive.
NextWave not only has its skeptics, but outright critics as well.
Rivals have challenged NextWave's FCC licenses, charging that the company's winning bids were fueled by illegal levels of overseas investments. The dispute evolved into formal challenges to NextWave's licenses, and the company waited a precious eight months before the FCC finally handed over the wireless licenses.
Since then, another small wireless start-up has filed for bankruptcy, and Wall Street investors have turned chilly toward proposed stock sales by NextWave and others in the industry.
But Walsh said the company is confident the cash crunch is short-term.
"The company remains a viable, going, growing concern." Walsh said. "We will see the day when NextWave becomes a full-fledged national wireless carrier."
She added, "Whoever said this was going to be easy?"
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Copyright 1997 Union-Tribune Publishing Co.
Well, I guess they can use this to get rid of some deadwood huh? Two steps forward, one back.... |
