Verado Cuts Staff, Hires Banker

May 25, 2001 -- Data center operator Verado said this week that it is eliminating 230 jobs, and has hired an investment banker.
The Denver-based company, formerly known as First World, said the cuts would result in $20 million in annual savings. The cuts affected 54 workers in its core data center division and 176 additional positions in other parts of the company.
Verado also said it had retained Credit Suisse First Boston to "evaluate re-capitalization alternatives that could further strengthen the Company's financial position." The company did not provide more specific information about the range of alternatives that might be considered.
However, Verado indicated that it ended the first quarter with $108.8 million of cash-on-hand, which combined with the cutbacks will extend the company's funding through the end of 2002.
"We have made a commitment to our investors to focus on our core strengths and take all necessary steps to make Verado one of the most competitive data center and managed services companies in the marketplace," said Donald L. Sturm, chairman of Verado's board of directors.
"Over the past several months we have been successful in divesting many of our non-data center assets, consolidating our operations and completing infrastructure and network upgrades," said Tom McGrath, President and CEO. "Verado is now able to streamline its operations and workforce in certain areas while growing in other areas that will position the company to take advantage of market opportunities."
The cutbacks included positions at all levels, Verado said. The company also said that Executive Vice President of Corporate Planning David Gandini was departing.
Verado Holdings, Inc. is a provider of outsourced managed services and data center solutions for businesses. The company currently operates data centers in Denver, Dallas, Houston, Portland, Santa Clara, Irvine, San Diego, and Salt Lake City, totalling approximately 240,000 square feet of space.