Covad announces layoff of 400 workers

SANTA CLARA - Covad Communications announced last week that it will lay off almost 400 employees, which represents 13% of the company's workforce.

The DSL provider is also holding off on expansion of its national network to more than 2,000 central offices, covering about 45% to 50% of the U.S. market. The company says the reason for the expansion halt is that it expects to gain more business in the regions where it already operates. That increase is a result of the rollout of line sharing technology.

Covad says the workforce reductions should let the company cut its costs by between 20% and 30% in 2001.

The announced cuts come on the heels of a disappointing third-quarter financial report in October. The company attributed its poorer-than-expected performance to the fact that nine of its ISP reseller partners were unable to pay fees owed to Covad. The company's CEO Robert Knowling resigned shortly after the delivery of the bad news.

Earlier the firm lowered its third-quarter reported revenue and added five more ISPs to the list of resellers that say they are unable to pay Covad.

Covad: www.covad.com