Cidera Fires CEO, COO and Lays Off 130 Employees
Founder and chairman Doug Humphrey assumes CEO duties.
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Content delivery provider Cidera (www.cidera.com), laid off about 130 employees on Thursday; including its CEO, COO and other VPs. The layoffs affected all departments within the company.
Richard Hanna, president and CEO, and Bob Marggraf, COO, were reportedly asked to resign. Chairman and founder Doug Humphrey now assumes the role of CEO.
When reached for comment, a company spokesperson would only say, "No comment."
For some, the news wasn't a surprise. "Cidera grew to be too big and top heavy with no marketable product to show for itself," said one ex-employee who left before today's layoffs.
In December 2000, Cidera officially withdrew its IPO because it received over $75 million in private financing from investors like The Carlyle Group, GE Equity, MCI Worldcom and Trans Cosmos. If Cidera had gone through with an IPO, the proceeds would have been about $50 million. In SEC filings, the company said it had $358,000 in revenues for 1999, with net losses mounting to over $11 million.
Cidera doesn't deliver content directly to end users, but offers satellite delivery bandwidth to other content delivery companies. Once, it was the only company doing so, but now companies like PanAmSat and Edgix are in the space. But other content delivery companies like Akamai, iBEAM and Digital Island have all been hit hard. All have seen their stock prices drop dramatically in recent weeks -- the once mighty Akamai is trading at 20, after a 52-week high of 345 ½.
Doug Humphrey founded Laurel, Md.-based Cidera in 1997, after founding Digex, an ISP company. In January 2000, Cidera changed its name from SkyCache then hired Hannah as president and CEO to lead the company through its planned IPO. But after the market slowdown, Cidera was slow to react. Two months ago, Cidera had a company wide reorganization that didn't result in job cuts.
"This is not a sign that the company's going down the tubes," said one industry source. "It means they're willing to do very difficult things."