to Close Six Data Centers
will focus operations on facilities in Denver and Irvine
Oct. 2, 2001 -- Managed hosting provider Verado Holdings
said today it will close six of its eight data centers and lay
off 50 employees in a cost-cutting move designed to make the company
Verado said it will close data centers in Dallas, Houston, San
Diego, Santa Clara, Portland and Salt Lake City and consolidate
its operations in facilities in Denver and Irvine, Calif.
The company said it would help customers in the six centers
to either migrate their services to Verado's Denver or Irvine
locations or to another service provider.
50 jobs being cut represent about 16 percent of the company's
workforce. Verado had eliminated 260 jobs in earlier streamlining,
and has hired Credit Suisse First Boston to explore the company's
"Businesses want a high level of confidence in the
provider's financial strength and its ability to weather this
tough economic storm," said Tom McGrath, President and CEO
of Verado. "Today's actions, though very difficult, will
provide our current and future customers with that level of confidence.
this consolidation, Verado will strengthen its cash position,
enhance its Denver and Irvine operations and better position the
company to provide advanced managed and professional services,"
Verado was previously known as First World. During the past year,
it has changed its name and shifted its focus and customer base
from colocation to managed services. The company has also sought
to raise its visibility with a marketing campaign that has included
web advertising and radio spots on NPR's "All Things Considered."
The company can "provide these advanced services from centralized
locations and therefore no longer requires maintaining disperse
data center facilities located near the customers operations,"
the company said in a statement.
"The past year has been challenging for our entire industry
due to both marketplace and economic conditions across the United
States,'' said McGrath, President and CEO of Verado. "The
chief concerns of businesses who want to select a managed and
professional services provider are not just how advanced their
products and services are or even the cost savings that can be
is a provider of outsourced managed services and data center
solutions for businesses.