iPass to slash 13 percent of work force
IPass chief executive Evan Kaplan said the company has “initiated a reduction in force that will affect a total of approximately 70 people from a global workforce of approximately 520,” in order to “free up resources” for strategic investments he wants to make to transition the supplier of remote access tools for mobile workers to “3G mobile broadband.”
A more prosaic reason given for the job cuts was “to align the company’s cost structure with an expected decrease in usage revenues” in the face of a “brutal and the sharp decline in business travel.”
The Redwood City company reported a six percent year-over-year drop in revenue for its 2008 fourth quarter to $46.4 million, below the company’s own downwardly revised estimate. Its net loss more than doubled to $86.7 million, thanks to an $84.1 million asset-impairment charge.
The force reduction is expected to save the company $1.75 million in “non-stock compensation” per quarter, beginning next quarter.
Kaplan took over as CEO in November when former CEO Kenneth Denman left “to pursue other business opportunities.” That transition, alone, was estimated to cost the company between $400,000 and $600,000.
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iPass went through another restructure yesterday (8/4/2010). Many key individuals were negatively impacted. Many of those individuals were responsible for the very products that generate revenue for the organization.