Helio Cutting 100 Jobs, August ‘Best Month Ever’


Helio spokesman Rick Heineman confirms the “virtual” carrier is cutting 100 jobs, or about 15% of its workforce, primarily from its field sales team. While the carrier will still market itself nationally, Heineman says Helio will focus on growing its subscriber base in big cities, where it has had the most success getting people to sign up for its expensive, youth-focused service. He says August was the company’s “best month ever” in terms of growth, and July its second-best, but wouldn’t elaborate on subscriber numbers. At the end of June, Helio had about 100,000 subs.

The news comes two days after parent company EarthLink, which co-owns Helio with Korean wireless carrier SK Telecom, said it would cut nearly half its workforce. New EarthLink CEO Rolla Huff is on a mission to return the Internet service provider to profitability, and the company has already sunk more than $250 million into Helio. In July, EarthLink approved $30 million more funding for the carrier, but said future funding would come only if Helio meets “agreed-upon operating milestones.”

Updated: After the jump, an internal staff email sent by Helio CEO Sky Dayton, via Moconews. Dayton says more than 80% of Helio’s sales are coming from less than 20% of their sales outlets, concentrated in the top 20 markets. The company will trim its field offices from five to two: Mike Dickson will run Helio’s new “West” sales team and Brian DeMauro will run the “East” team.

Previously: EarthLink’s (ELNK) Helio ‘Realigning’, Are Jobs Cuts Next?
See Also: New EarthLink CEO Tightens Helio’s Cash Leash
Ocean A Slick Phone, But Helio Incinerating Cash

—— Forwarded Message
From: Sky Dayton
Subject: ALL HELIONS: Field restructuring and other changes

Fellow Helions,

As I shared in my note to you last weekend, we are growing faster than ever before. July was a record month, and August has already smashed July by over 25%. Periods of fast growth are the ideal times to find ways to be more efficient, to strip away the actions that are not producing results and to redouble your efforts on the actions that are working. If done correctly, you solidify your gains and grow even faster.

Over the past few months, your executive team has been hard at work on that equation, and today we are taking an important step that will get us further down the road to profitability.

As most of you are aware, when we started Helio we set up a large field sales organisation which eventually grew to five offices around the country. Helio was new, our products and brand were not well known, so this structure allowed us to have a lot of people calling on retailers to make them aware of our company. Over the past year and a half since launch, awareness of Helio has grown, we have launched breakthrough products and services, and we have learned a lot about where consumers are buying. We found that over 80% of our sales were coming from less than 20% of our doors, and that these doors were concentrated in the top 20 markets.

Through this analysis, we realised that although we had excellent people representing us in the field, we were utilising them very inefficiently. Moreover, we found that we could do a lot more with less: Instead of being spread far and wide with our people, we could concentrate our effort on the top 20 markets and focus on getting the doors that were already producing for us to do more, while at the same time adding more doors that have similar characteristics. And we could accomplish this with a smaller, more targeted field team.

Today we are restructuring our field sales organisation. We will still offer our services nationwide, as we do today, and we will still be sold through retailers in every city, as we are today, but we will be reconcentrating our physical field team on the top markets where we are already seeing the bulk of our success. We are going to mine where we know the gold is.

As part of this, we are going to consolidate our field offices from five to two: a West and an East, run by Mike Dickson and Brian DeMauro, respectively. Brian and Mike are accomplished Helio veterans who now have greatly expanded roles. They will lead a team that will include feet on the street in each of our new top 20 markets. Mike and Brian will share more about the new field organisation soon.

Our HQ Sales team will continue to be lead by Michael Grossi as interim EVP Sales & Distribution and Jay Lee as interim head of Helio/SKT Sales & Distribution, Terry Hsu, Steve Priesand and George Abdelmalak. We will continue to operate our Company Owned Retail Stores (CORS) and to keep expanding our Company Owned Retail Kiosks (CORKS), which are having early success.

In addition to the field sales restructuring, today we are also slimming the team at HQ, representing about 5% of our overall workforce. Just like in the field but on a smaller scale, we realised that we need to operate more efficiently at Helio House as well.

To those of you that are affected by these changes, we wholeheartedly thank you for your dedication and contributions. You should be proud about what you have accomplished at Helio. Our staff will work with you to do everything we can to help with your transition. We hope that you will continue to be part of the extended Helio family for years to come.

I know many of you have questions. We look forward to sharing more on our updated growth plans at our Sept 5th All Helions meeting. We will also have a Q&A session so we can answer any areas we miss. There is great potential in Helio as long as we stay focused and continue to push ahead.

I look forward to speaking with everyone next week.