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 profitable.
Denver-based 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.
The 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 funding options.
"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.
"Through 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," McGrath added.
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 achieved."
Verado is a provider of outsourced managed services and data center solutions for businesses.