The job cuts would cost between $60m and $70m, yet EarthLink expects to save between $25m and $35m for the rest of the year as a result of the restructuring.
The jobs will be lost in several locations where the company plans to shutter its operations: Orlando, Florida; Harrisburg, Pennsylvania; San Francisco, California; and Knoxville, Tennessee. Other job losses will occur in its Pasadena, California and Atlanta operations, but those facilities will remain open, EarthLink said.
And more cuts may be on the way.
While we see this as an important first step in unlocking the underlying value that we believe is in our company, we are only eight weeks into the process of repositioning EarthLink for the future, said EarthLink chief executive Rolla Huff, in a statement.
Shares in the company shot up 7% to close at $7.34 on the Nasdaq following the announcement.
