Struggling Internet service provider to cut 1,200 jobs

In the wake of another unprofitable quarter, Genuity Inc. said it would cut up to 1,200 jobs, or 30 percent of its work force, and reduce its capital spending.

There was no word when or where the cuts among the Internet services provider's 4,000 employees would occur.

On Thursday, Genuity posted a loss of $257.5 million, or $1.15 a share, in the first quarter in contrast to a loss of $292.4 million, or $1.52 a share, a year earlier. Sales fell to $281.6 million from $299.5 million a year ago.

The company said it will reduce capital spending this year by up to $200 million, to a range of $400 million to $500 million. Genuity also is shutting down a professional services unit in western Europe, and is considering additional consolidation of data centers and administrative facilities.

Genuity also announced a new sales deal with Verizon Communications, from which the company was spun off in 2000.

In the new Genuity-Verizon deal, Verizon agreed to refer customers for Genuity's Black Rocket Voice product, which uses lower-cost Internet hauling for voice calls, and take over management of modems through which Genuity offers Internet access.

Verizon has agreed to a five-year "take or pay" pact to buy $500 million worth of services from Genuity, including Internet access, network security and Web page hosting services.

News source: The Nando Times - Struggling Internet service provider to cut 1,200 jobs

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