InterNAP Cuts 118 Jobs in Reorganization

April 23, 2001 -- Internap Network Services said today that it is cutting 118 jobs in what it called "its final cost cutting measures." The announcement by the Seattle-based company, which provides intelligent routing services, follows the layoff of 65 employees in early March.
"Though resulting in more conservative fiscal management, these reorganization and cost-reduction efforts will not reduce our ability to grow the business," said Tony Naughtin, President and CEO of Internap. "These changes provide Internap with greater overall efficiency and financial muscle, and help ensure not only our long-term ability to serve our growing customer base, but to launch new services that will enable the enterprise to use the Internet more efficiently."
The company said it will discuss the cutbacks in its quarterly earnings call scheduled for Tuesday.
After the March cuts, some stock analysts had raised questions about InterNAP's ability to gain additional funding without further belt-tightening. Among them was Epoch Partners' Mark Langner, who said InterNAP's "operating strategy is not sustainable in its current form given funding needs."
"We do not believe the company will be able to obtain its sought-after financing under favorable terms," Langner wrote in a recent analysis of the company. "We believe (InterNAP) should consider an operating restructure, an act that should be viewed favorably by investors. InterNAP needs to pro-actively reduce its operating expense and exposure to more immature markets."
InterNAP provides Internet connectivity that is faster and more reliable than conventional Internet service by bypassing congestion points on the Internet. It serves key markets throughout the United States including Atlanta, Boston, Chicago, Los Angeles, New York, San Jose and Seattle.