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DSL provider cuts staff
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January 16, 2001: 6:03 p.m. ET
Rhythms NetConnection says staff cut of 23 percent extends cash to early '02
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NEW YORK (CNNfn) - Broadband provider Rhythms NetConnections Inc. Tuesday became the latest Internet company to cut staff in an effort to save cash and extend its life.
The company said Tuesday evening it is laying off 23 percent of its work force and taking a charge of between $15 million and $17 million in the current quarter as it narrows its geographic focus on 40 major markets.
 The Englewood, Colo., provider of digital subscriber lines, or DSL, service, said the 450 employees affected by the layoff were notified Tuesday. The cost-cutting effort should reduce its loss before interest, taxes, depreciation and amortization to $395 million, which it said is 15 percent below analysts' forecasts.
Earnings tracker First Call forecasts the company would lose $9.70 a share this year, up from a forecast loss of $8.14 a share this year.
Company officials said the move would allow it to extend its cash into the first quarter of next year.
"We believe our evolving business model strikes the right balance between growth and cash conservation in order to support the long-term future of the company," said Jay Braukman, the company's chief financial officer, in a statement issued after the market close Tuesday.
The company said it should still be able to grow its customer base to more than 175,000 lines in service by the end of this year, despite cutting back to 40 major markets rather than a nationwide focus. The company ended 2000 with 67,000 lines in service, up from 12,500 lines at the end of 1999.
It also said it expects net revenue for the year to exceed $150 million. First Call forecast it would see revenue of $175 million this year, up from a forecast $61 million.
Shares of Rhythms NetConnections (RTHM: Research, Estimates) gained 13 cents to $2.19 in trading Tuesday ahead of the announcement. 
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Rhythms NetConnections
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