Burst.com Cuts Staff by 80 Percent
In light of its third quarter results and disappointing stock price, Burst (www.burst.com), announced that the company has decided to cut its staff from 95 to 18. Burst has decided to close 6 sales offices that were located throughout the U.S., and the deepest staff cuts occurred in marketing and sales.
The Burst business plan is heavily dependent upon broadband deployment.
Regarding the recent layoffs, Doug Glen, Burst president and CEO, stated "…Unfortunately, our inability to fully execute on the business plan at this time, coupled with current market conditions, has impaired the company's ability to raise financing and generate significant near-term revenue. Therefore, management has taken prudent action to reduce overhead, and to seek additional financing in order to outlast the current market conditions."
Richard Lang, a co-founder of the company, stepped down from the CEO position in October and was replaced with Doug Glen. Lang remains the chairman of the board and involved in strategic decisions. At that time, the company stated that this change in management was to allow the focus to change from technological development to large- scale deployment.
Glen also mentioned that the company was expecting to supplement the $5 million financing it received from SBC Communications in August with additional funding. Burst also intends to focus on increasing revenue generation from hosting services and software licensing.
For the current quarter, only $13,018 worth of orders were taken for software licensing fees, hosting, and consulting services. While they have cut its internal sales staff, Burst is hoping to expand this number through outsourcing some of its sales.
The company also announced it is working with Equity Funding Group, LLC and Reedland Capital Partners, a Division of Financial West Group, on near-term financing projects. It also has engaged the investment banking firm of Punk, Ziegel & Company to explore additional long-term financing options and provide strategic guidance.
Burst's stock was down 47 percent as of noon PST and is currently trading under $0.50. Burst reported a loss of $4,680,188 on revenues of $94,891 for the third fiscal quarter of this year, ending September 30,2000.
For the year-to-date, Burst has reported a loss of $14,739,501 on revenues of $449,768, which is larger then its loss to date last year when it reported a loss of $8,279,320 on no revenues, as the company was still in the development stage.