Touch America lays off more than half of work force
Associated Press Writer
HELENA - Touch America Holdings Inc., whose stock has traded for less than a dollar a share for nearly a year, laid off more than 200 employees Wednesday - more than half its remaining work force.
Company spokeswoman Linda McGillen said the 216 job cuts were effective immediately and would leave the telecommunications company with just 162 employees.
''It's no secret that Touch America has been struggling to stay cash-flow positive, and this was part of that,'' McGillen said. ''We sold the last of our voice customer accounts last week, and as part of that all of the employees that supported those accounts, as well as some others in other areas, were eliminated.''
Employees were informed cuts were being made during a companywide conference call from President and CEO Bob Gannon early Wednesday afternoon. Individual workers being cut were notified separately by e-mail a short time later, McGillen said. Most left immediately after getting notice.
McGillen said none will receive severance pay, but employees will retain their health insurance through the end of month.
Touch America transformed from the energy giant Montana Power Co. into the telecommunications offshoot in 2000. It's been in declining financial health ever since, and company officials have warned that bankruptcy remains a possibility.
The 90-year-old Montana Power sold its energy properties for about $1 billion in cash in 2000, investing most of the cash in laying 24,000 miles of fiber-optic cable.
The conversion came just as the telecom industry fell flat.
The situation worsened for the company last summer when Touch America's stock fell below $1 a share. It has never recovered. The NYSE delisted the stock in March.
Touch America began trading on the Over-the-Counter Bulletin Board, but was delisted from that exchange in May after failing to meet deadlines for filing earnings reports with the Securities and Exchange Commission.
It has been trading on ''pink sheets'' since and closed at 13.5 cents per share Wednesday.
McGillen said of the 216 jobs being cut, 100 were in Montana, 72 in Butte alone. The other eliminations occurred throughout Touch America's system, including 45 in Denver, she said.
McGillen declined to comment further on Touch America's future, including whether further layoffs were expected and whether bankruptcy protection would be sought.
''I think all that I would say is we have been looking at different options, and bankruptcy remains an option,'' she said.