Excite@Home, the nation’s largest high-speed Internet service provider said Tuesday it will lay off 500 staffers in the next three months and cut back on the features it provides on its Excite Internet portal. The announcement comes on news that the Redwood City, Calif.-based company will file for Chapter 11 bankruptcy protection late this week or early next week unless it receives an unexpected cash infusion.
Excite subsid MatchLogic will shutter as part of Excite@Home’s downsizing. MatchLogic had been the company’s Internet marketing and advertising subsidiary. The latest layoffs represent 25% of the company’s workforce. Excite@Home will have 1,350 employees remaining after the latest staff reduction.
While Excite said that it continues to explore options with respect to its liquidity needs and capital structure, the company doesn’t have enough cash to cover its operating costs and $800 million in debt.
Excite’s latest troubles make its 4 million subscribers and technology an attractive takeover asset for AT&T. A potential bid was discussed at AT&T’s most recent board meeting held last week. AT&T has majority control of Excite@Home and remains its largest shareholder. AT&T inherited its @Home stake and board representation from its acquisition of cable TV leader Tele-Communications.
Excite@Home’s stock closed at 27¢ on Tuesday, its lowest price ever, since commanding $99 share prices at its peak in 1999.