Photo: jwalsh via Flickr
High-speed wireless provider Clearwire announced a 15% workforce reduction this afternoon, as the company’s losses continue to mount despite growing subscriber numbers. The news comes as Clearwire faces the threat of increased competition from Verizon, which plans to unveil its LTE (Long Term Evolution) high-speed service in 38 cities by the end of the year.Both services boast of “4G” speeds, although the precise definition of that term is a subject of debate as the marketing-speak ratchets up. Regardless, Internet speeds are higher on these networks than the 3G networks operated by all four major U.S. carriers.
The company’s third quarter earnings report, which crossed the wire after market close this afternoon, contained a lot of good news: the company added 1.23 million subscribers during the quarter, bringing its total to 2.84 million, and third quarter revenue of $147 million, which is more than double last year’s figure. But those subscribers came at a steep cost: operating losses rose to $540 million, versus $520 million last quarter and $291 million a year ago.
Clearwire, which is part owned by Verizon competitor Sprint, didn’t reveal exactly how many people would lose their jobs. But the company had 3,600 employees in May, so that suggests at least 400 people are out.
The company is also canning planned retail openings in Miami and Denver, delaying the release of a branded smartphone, and slashing marketing costs and contractors.