Verio has been a huge drain on NTT’s resources ever since its $5.5bn acquisition in September 2000. Figures released by the Japanese incumbent last month showed Verio lost $161m on revenue that fell 15.9% to $137m in the six months to September 30.
Suzuki said the IT slump in the US is lasting longer than it expected, and NTT can see no signs of recovery. However, he said: Our restructuring is proceeding as planned. It is on track. NTT will continue to search for cost-cutting measures while maintaining the quality of service, he said.
Under NTT’s reorganization plan, Verio’s headcount was trimmed to 1,800 at the end of September compared with the 3,250 it inherited, and its 46 data centers were cut to 11.
NTT is not the only overseas company that was lured by the prospect of soaring internet traffic when it undertook an expensive expansion in the US that ended in tears. In November, Cable & Wireless Plc cut 3,500 of its 12,500-strong global workforce and announced plans to reduce the number of its global data centers from 42 to 23 as it withdrew from domestic business markets in the US and Europe to concentrate on multinational customers and service providers.
Source: Computerwire
