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Prodigy is coy about layoffs
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September 24, 1997: 5:10 p.m. ET
Online service won't confirm or deny job cuts will be announced Thursday
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NEW YORK (CNNfn) - CNNfn has learned that beleaguered online service Prodigy Inc. will announce a round of layoffs Thursday following a broad restructuring of the company.
Sources within the company said an undetermined number of employees could lose their jobs as part of plans unveiled Wednesday to split the three major operations into separate, autonomous divisions.
Prodigy, based in White Plains, N.Y., refused to confirm or deny the layoff reports.
"We'd announce anything to our employees if there was anything to announce," spokeswoman Carol Wallace said Wednesday. "Nothing has been announced."
The fourth-largest online service said it is recasting the company to focus more on Internet services, software development and global expansion efforts. The company appointed four top executives to lead the divisions.
Prodigy Internet will be responsible for online services, while Prodigy Solutions will be in charge of software products and Prodigy International will handle the overseas business.
Russ Pillar will take the helm at Prodigy Internet, while Inder Gopol will head Prodigy Solutions and Paul Tucker will be in charge of Prodigy International. Paul DeLacey was named strategic advisor to Prodigy Inc. Chairman Greg Carr.
The divisions will officially be part of Prodigy Inc., but will operate as separate companies, said another spokesman, Mike Darcy.
Prodigy had been a leading online operation with over two million subscribers until it hit hard times several years ago. In April 1996, the company was forced to lay off 115 employees to save money.
A group of investment bankers and Carr's company, International Wireless, acquired Prodigy from I.B.M. and Sears, Roebuck & Co. for $250 million in June 1996 and undertook a massive reorganization.
Since its heyday, Prodigy membership has plummeted and it has fallen to fourth place among online services, behind America Online, CompuServe and the Microsoft Network.
Carr said in a statement the changes will help the company continue focusing on its three major growth areas.
"In the 15 months since we acquired the Prodigy business, we have seen our businesses change and expand," Carr said. "This growth has helped us to realize that we must better focus on these business opportunities."
The company has been considering an initial public offering. Darcy said there's been no movement on those plans, but said the restructuring could be the first step of an IPO for one or more of the new divisions.
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Prodigy
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